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(4/8/17)
The S&P 500 stalled out near the 2375 level this week which
was along a newly developed downward trend line. As I mentioned in the mid
week update we could be seeing a complex corrective pattern evolving such as a
"WXY" Double Zig Zag. If that's the case then we are missing
"Y" to complete the pattern with a final target price near 2300.
Meanwhile notice there is an upward trend line (purple), from
the low in early 2016, which is approaching the 2300 level so that does appear
to be a key support zone. In addition a drop back to the 2300 area may
allow for a spike upward in the VIX which has been encountering resistance the
past 15 months along its downward trend line (black). Currently this trend
line is in the upper teens.
Finally, as we have see the past year, each time the VIX has
rallied back to its downward trend line a reversal has occurred (points A to B)
which has allowed the S&P 500 to move higher (points C to D).
Amateur Investors
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