The Sky Is Falling Sideways, Where Are The Risks?

by Kimble Charting

While many analysts are talking about the sky falling in stocks, the chart below reflects that the S&P 500 (NYSEARCA: SPY) may simply be in a sideways trading range. As well, the S&P 500 remains within the uptrend channel (testing the lower support).

Seen this price action before? Yep, back in 2015-2016. At that point (1), the S&P 500 has just hit its 161.8% Fibonacci extension level at the top of the uptrend channel. That prompted a sideways trading range for 20-months.

This year, the S&P 500 hit its 261% Fibonacci extension level and has proceeded to trade sideways yet again at point (2). This has last 10 months thus far, but a resolution is nearing…

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If the sky is to fall in stocks, the trading range and channel support need to break lower at point (3). If dual support breaks at (3), selling pressure in the S&P 500 could see itself 10% lower rather quickly.

As long as support holds, this bull is still alive. Stay tuned!

This article was first written for See It Markets.com. To see original post CLICK HERE

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