Monthly Archives: October 2016

Contrasting Basing Patterns on the S&P 500 Chart

The 2120 support level on the S&P 500 was first tested in early September and it is currently being retested. While the level may be the same, there are some noticeable differences in the price action between the two tests.


In September the dark or bearish marabozu candles were countered by white marabozu candles, and in the process a bullish morningstar reversal pattern formed. In contrast the recent price action above the support line has been characterized by narrow opening and closing range candles and a high and low shadow set of candles that suggest indecision and do not instill confidence in the current basing process.

A Simple Take on the Status of the S&P 500 Chart

The S&P 500 chart is simply all about the integrity of the the 2120 level over the short to intermediate term. A break below it and the index enters a support vacuum until the 200 day moving average currently in the 2069 area, while a strong hammer reversal candle or some basing action could embolden a bounce and a potential retest of the September high level in the resistance zone.