S&P500 Testing the Low

The market has been churning people stomach up and down. The market is not falling off the cliff for the last 6 weeks. Take a look at the S&P500 chart. The S&P500 has been testing the low 850  for 6 times in the last 6 weeks (each candle represent 1 week). It has been holding very strong at 850 despite all the gloom and doom news.

So the million dollar question is will S&P 500 break through the low of 850 and jump down the cliff?

From the weekly chart, I seriously do not think that it will break through the low of 850. This is because of the following points …

- MACD Histogram bar is getting smaller as each week passes. This mean that the impact of the downside is not that huge.
- MACD Lines does not seem too good but it seem like the black line is going to cross the red line. This mean that a turning point might be coming.
- RSI Reversal is flat at the 25 mark now. This mean that there is a high chance that it will start to rise which indicate a bull is coming.
- If you take a good look at the chart, you might even notice that a continuous candlestick pattern might be forming.

That said from the above points, the market might still give us a huge surprise and tank us for a few more time.

In Conclusion …

I do not care about where the market will go in the short term. I also cant really predict where the market will go. So I do have a safety level for my short term trade but not my long term investment. If you have read my previous article about the future of the Dow, which i talk about the movement of the Dow that i think will range, you will have some idea where i think the S&P500 will go in the long term.

Treat your investment as a business but treat your trading as a casino or a probability game.