Let’s take a quick glance at the “Color Structure” of the S&P 500 on the V-Spike Reversal into Resistance and chart possible price pathways from here.
We’ll start with the V-Spike Reversal Pattern on the intraday color chart:
We’re seeing the Color Structure grid which quantifies swings in the market (and impulsive phases like the purple area).
We have a green upswing into the prior resistance price cluster near 1,980 and we’re watching this level extremely closely.
In simplest terms, the market should be traded cautiously/bearishly on a swing down against 1,980 and otherwise continuously bullish for yet another breakout and short-squeeze trigger above 1,980 (it would target 2,000 on a breakout).
The bigger picture reveals the larger trend structure:
The same swing logic applies to the Daily Chart in a persistent uptrend.
We do note the first clear “Lower High” into October and we’re on guard against a sudden reversal and formation of a “Lower High.”
A Lower Low followed by a Lower High would be two steps in a larger Trend Reversal… but we’re not there yet.
For now, we note the potential turn-down into 1,980 and if price continues to break resistance levels as its been doing, then 2,000 is the next target followed by 2,020 and beyond as the uptrend continues.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://ift.tt/178Lhrq
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