Will S&P 500 Break the Next Resistance Level?

Last month, I posted an article on how S&P 500 would have difficulty breaking pass its 50% Fibonacci Retracement level on Long & Short Investment. We now know that 50% Fibonacci Retracement level was easily broken and has recently made it all the way to $1150. $1150 marks the next major resistance level
after 50% Fibonacci Retracement level at $1121. Obviously, if Bulls break $1150, I’m sure the stock market will rise to $1225 as it is the 61.8% Fibonacci Retracement level. Let’s keep in mind that if $1150 gets broken, then we should consider going long to ride the bull market up to $1225. However, it would seem like it be difficult to break $1150 but then again, anything is possible with this current stock market even with today’s drop. I would guess the stock market will need the earning season to continue to be positive just like the last quarter for it to pass above $1150. We now know Alcoa did not make a good earning season start this week, thus today's fall.






On the flip side, S&P 500’s major support level is now at $1121, which was previously the resistance level. The stock market most likely will be headed toward this support level. I would consider stocks like GOOG, BIDU, AAPL and ETFs like GLD, GDX, GDXJ to go LONG when S&P 500 is close to 50% Fibonacci Retracement level.

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1 comment:

UltimateToyGalaxy said...

By the way, if S&P 500 fails to cleanly break $1121 50% Fibonacci Retracement level and does not move further below, then there is a high probability for S&P 500 to retrace back to $1150 and even break this major resistance level. However, if S&P 500 breaks $1121 level, then expect it to test $1100 and $1090. $1090 level is critical because when it gets broken, then expect S&P 500 to reach all the way down to $1030 level for support. Keep a close eye out for these levels!