I wrote in my last post that this week is very important for SP500 and it is a test for bulls. They failed.
First time since December 2012 SP500 closed below 21 and 33 moving averages on weekly chart:
Of course there are some supports where bulls may try to change situation. For example 55 moving average looks like such a place. There were corrections before which looked serious at first but lasted only a short time and bulls managed to save situation.
If this move down will continue, we can spot a support area between 1550 – 1730 points which we can see on monthly SP500 chart:
We have here:
- Fibonacci retracements
- support line (green) from 2007’s top
- trend line (violet)
We are already over 120 points down from recent top, so this support area may be reached quite fast.
Oil is falling down as a rock. On monthly chart we can see that it is right at 0% line, which may work as support:
If move down will continue, we have 127% and 138.2% extensions as possible support.Of course this is a monthly chart. On lower time frames we may see stronger corrections up, hard to tell.