The S&P 500 held support for the 2nd time in the last two weeks near the 23.6% Retrace which
is just
above the 2810 level.
Based on the current chart pattern, in the S&P 500, there are three possible
scenarios to watch for over the next week or so. The first scenario is a
Head and Shoulders pattern. If the Neckline (black line) is broken to the
downside, then the target range would be in the 2725 to 2650 range. 2725
is near the 38.2% Retrace and is where the S&P 500 found support in March (point
A) while the 2650 area is at the 50% Retrace (point B).
The 2nd scenario is that the S&P 500 is exhibiting an "abc" type pullback after
its strong move upward from the late December low. In this scenario the
target for "c" would be around 2725 which is near the 38.2% Retrace. For
either scenario to occur the S&P 500 would need to close below the 2800 level
next week.
The third scenario would be the S&P 500 is forming a small "Double Bottom"
pattern. In this scenario the S&P 500 needs to hold support next week near
the 2800 level. If this occurs then the S&P 500 would likely make one more
attempt to make a new high near the 3000 level this Summer.
Remember the 3000 area is where the 261.8% Fib Extension Level calculated from
the 2009 low.
Amateur Investors
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