The following is the outlook for the S&P 500 heading into next week, March 1-5.

The way the market is right now is what I talk about in this weeks newsletter (sign up along the right hand side…it’s free).  Movements have been somewhat erratic, unless a trader is very skilled they can easily get whipsawed in this market.  We had the decline in late January and early February, now we have rallied back and sit basically in the center of that former decline.  What is interesting and what makes the short-term outlook uncertain is that we have exceed the 1104 – 1105 brief rally high on February2 .  Tuesday, Wednesday and Friday last week we moved through that point everyday.  Thursday had its own interesting action needless to say.

So we sit at a  point where short-term probabilities are about equal for moving up or down.  Luckily there is no need to predict anything to make money.  Rather we let the market lead by only stepping in in force when the market has given us reason to believe there is a higher probability it will move a certain direction.

1115 is resistance on the upside.  A break above indicates strength and with little resistance until 1130-1132 our target is 1130.  A drop back below 1115 before a target is hit shows some indecision and that the choppy trading is likely to continue.  Beyond 1132 resistance is at 1150.

The weekly average range for the S&P stands at about 31 points.  The range that is covered this week will fall short or be greater than this average number, but it does give us an indication of what kind of levels are likely to be within (or outside) target range in the upcoming week.

Thursday’s low at 1086 is a level to watch, a drop below that bearish and will likely reach support at 1080.  Below 1080 we have a collection of days which ranged between 1080-1060 so this is another areas which could get choppy unless we have a swift move through it. Further support comes in at 1056 and 1045.

Since Feb. 5 we have a short-term uptrend.

S&P 500 Daily, FreeStockCharts

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Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.

Strong shortened trading week we saw, as the S&P 500 managed to break above the 1104 level and closed out the week above it at  about 1109.   1104 was the price point I mentioned in previous posts as being a pivotal point for the market.  Exceeding that point puts the market in a “no man’s land” there there is a conflict between short and longer term signals.

The market has pulled back to near the middle of a recent high and a recent low, both which sit at the opposite ends of what has been a period of expanded volatility.   Which path the market will take from here becomes somewhat unclear when looking at multiple time frames.

Short-term there is a strong trend higher starting from early February, but if we go back to early January it appears we are in correction.  Day traders are likely to like this area as the intra-day volatility has been quite tradeable.

For the week of Feb 22-26 the outlook is neutral at this point.  Resistance and targets on the up side are 1115 and 1132.  Beyond this is the high at 1150.  The break above 1104 does indicate a move to 1120, and a move through 1120 indicates a move to 1132.  Failure to reach the levels is bearish.

A close below 1104 is the first indication of trouble once again, but is not a clear sign.  1080 should now act as strong support, and if it does not provide support and prices fall through support comes in at 1060, 1055 and 1044.  1080 is also where our short-term trendline will approximately be broken if prices retreat this week.

Weekly average range is just over 31 points, so some of these levels mentioned are out of reach for the market this week, but are important for the larger picture.

For some fundamental concerns with this market, view Euro Banks; Domino Effect?

S&P 500, Daily. FreeStockCharts.com

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~Know your risks when trading. Please read the Legal Disclaimer page.

Holiday on Monday, so we are looking at a shortened trading week coming up.

Let’s get right into the levels to watch…after all I am writing this on Valentine’s day.  We are looking at the S&P 500.

Near resistance  is at 1080.  Beyond this there are intersecting lines at 1100 (trend and speed), with recent swing highs also just above this at 1105 (circled area).  As I wrote in past posts this is still what I will call my pivot point.  Price is always the main indicator and until it climbs back above that point, there is not real reason to think this correction has ended. That circle area has a high probability of stopping upward movement, if the market can get to it.

If we do climb above 1105 and can sustain it that is a positive sign of the market.  Resistance beyond is at 1114 and 1130-1132.  The highs are beyond this right around the 1150 region.

Weekly average movement is about 31 points right now.  So many of these levels are out of reach for this week but can be kept in mind for the longer term.

On the downside, 1060 (or close to it) has a been a bouncing point in the last 4 sessions.  This is a key area to watch.  Dropping below it, makes a retest of the recent lows at 1044 quite possible.  Interim support comes in at 1057.  Moves below the lows will have to fight through support at 1035 and 1029.

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S&P Daily, FreeStockCharts.com

Have a great weekend,

Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.

Friday’s late day, almost unbelievable rally, has set up sort of an if then, but if not, then this type of scenario.  So instead of just posting levels I am watching I will post what I am doing and what I am watching in the stock market.  Keep in mind this is not advice, nor is it a recommendation to buy or sell.  It is simply what I am doing…

I trade completely based on levels on the charts. And Friday’s market obviously was rather interesting. I had support pegged at just above 1052 and at 1045 on the S&P (see Markets Around the World Sell Off), it moved through the first and aggressively bought off the latter setting up a bullish daily candle – or so it would appear.

But this market is correcting overall. I remain bearish until 1104 is taken out. That is a ways away, but on the way to that level I am watching 1074, 1085 and 1091. Movement up through one has me consider that it is likely it may move to the next. 1085 and above begins to pull me to more neutral, and not biasing short positions. If that were to occur, I would need to see move back down below 1074 to get me biasing shorts again.

Those are the bigger levels I am watching overall. Intraday I use simple trendlines after about the first half hour of trading to zero in on reversals in the short-term (see Trading These Stock Market Swings for more info). Positions are taken aggressively on the short side when intraday trendline is down. Smaller positions are taken on upward intraday moves with upward sloping trendlines.

Very swift moves to the upside like what happened on Friday are pretty rare without some known catalyst such as news or the like.So it warrants caution, but does not indicate a reversal.

Very near support is at 1063 followed by Friday’s low near 1045.  Nearest support beyond this is at 1030.

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Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.

Downward pressure continues on the EUR having just made new (recent) lows and nearly reaching 1.3900.  A minor support band is likely from 1.3920-1.3900.  With little support beyond this, a break below 1.3900 will target 1.3800.  Some support may develop at 1.3860 and 1.3830 along the way.

Resistance comes in at 1.3950 followed by 1.3980-1.4000.  A push back up through 1.4000 is likely to test the short-term swing highs at 1.4030 and 1.4050.

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Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.

The pair continues to hit new lows, having just dropped below 1.3990 recently.  The outlook continues to be bearish for the EUR overall.

Short term target on the downside, if the pair can once again move below 1.3990 is 1.3940, followed by 1.3920 and 1.3900.  The pair has traded through most of the significant support, and little stands in the way of a move to 1.3800 over the coming days.

Minor resistance comes in just above 1.4050 with more significant resistance at 1.4100-1.4100.  Beyond this 1.4140-1.4150 is a resistance area. 1.4200 is current key resistance for the downtrend.

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Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.

The  EUR/USD (get a longer term analysis via the link) declined to a former swing low on Tuesday, but has so far managed not to drop below the 1.4025 swing level.  A drop below that level indicates another leg down in the downtrend for the EUR.  Support is likely to develop between 1.4015-1.3985 (the wide region here is due to the limit and stop clearing which often occurs around major levels and also well defined stop and limit areas), at 1.3960 and 1.3920.

There is minor resistance at 1.4085.  Further resistance is at 1.4100-1.4110, followed by 1.4130-1.4145, 1.4160 and 1.4180-1.4200.

The outlook for the EUR continues to indicate further declines overall.  A break below 1.4020 would confirm.  Keep in mind the  FOMC Statement is out at 19:15 GMT and traders should adjust their trading accordingly.

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Cory Mitchell, CMT

~Know your risks when trading. Please read the Legal Disclaimer page.

Quiet, relatively flat Monday for the  EUR/USD (get a longer term analysis via the link).  In fact, very little has changed since the last outlook…the levels to watch remain the same going into Tuesday.  Initial support is at 1.4120.  Support beyond is at 1.4100, 1.4085 and 1.4065.  At 1.4030 is the recent swing lows, with a drop below indicating another wave down for the the EUR.

The market has already corrected into the 1.4160-1.4180 region mentioned in prior posts and with that correction having taken place the overall bias is for a further decline in the EUR.    A rise above 1.4230 would challenge that outlook at least for the short-term.  There is a band of resistance which extends from 1.4180-1.4220, and Monday the pair could not get through this – it stalled before 1.4200.  A push above the band, 1.4230, indicates movement into 1.4260, with additional resistance at 1.4280 and 1.4300.

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~Know your risks when trading. Please read the Legal Disclaimer page.

The EUR/USD (instant analysis of any symbol via the link) has support which sits just above 1.4120.  Support beyond is at 1.4100, 1.4085 and 1.4065.  At 1.4030 is the recent swing lows, with a drop below indicating another wave down for the the EUR.

The market has already corrected into the 1.4160-1.4180 region mentioned in prior posts and with that correction having taken place the overall bias is for a further decline in the EUR.  A rise above 1.4230 would challenge that outlook.  There is a band of resistance which extends from 1.4180-1.4220.  A push above 1.4230 indicates movement into 1.4260, with additional resistance at 1.4280 and 1.4300.

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~Know your risks when trading. Please read the Legal Disclaimer page.

A more normalized day on Thursday with the EUR/USD stabilizing.  It moved lower in the early session but did recover to only finish down slightly.  The correction mentioned yesterday did occur; a new low was made first and then the EUR moved higher to test resistance which developed at 1.4140.  Now that the correction has taken place, albeit minor, overall the technical outlook for the EUR is weak going into Friday and next week.

A move above 1.4150 would provide evidence that the EUR/USD is not due to go lower quite yet.   The push through 1.4150 is likely to target the resistance of 1.4160-1.4180.  Beyond that there is further resistance at 1.4200-.4220.

On the downside, a move below 1.4050 is likely to test recent lows near 1.4030.  Beyond this support is likely to develop between 1.4015-1.3985, at 1.3960 and 1.3920.

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