S&P 500 Channel Breakdown Projects a 50% Retracement of the February Rally

By | June 24, 2016

The apparent ineptitude of British pollsters and the failure of institutional market participants to be properly positioned ahead of the Brexit vote sent world markets into a tailspin today. Just yesterday the S&P 500 was at the top end of its three month trading channel and poised to breakout to new all-time highs, but then in one session it collapsed back down to the lower end of that range, and is now threatening to take out support.

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If channel support is breached the pattern projects a target price measured by taking the height of the channel and subtracting it from the support line. It suggests a return to the 1960 area which is a 50% retracement of the rally of the February lows.

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