The US Stock Market (S&P 500) is facing a major challenge at resistance.
What happens here likely sets in motion the next swing and opportunities for the market.
Let’s highlight this level, note why it’s important, and update our targets from here.
Here’s the simple Weekly Chart of the S&P 500 (NYSEARCA:SPY)Index:
We’ll keep it simple and focus our attention on the 2,020 level which is the current cross-over of the 20 and 50 week Exponential Moving Averages (EMAs).
Think of this as a harsh wall of resistance that is a “Make or Break” Pivot level for the index.
Simply stated, if price continues the rally and shatters the ceiling of resistance, then odds shift to favor a future rally that takes the index above prior highs.
Otherwise, we’re planning for a simple pullback or retracement against this level at the moment.
Here’s the Daily Chart with more detail:
In addition to the 2,020 Weekly Level, we see the 61.8% Fibonacci Retracement at 2,030.
The “post-Fed” spike high and reversal also took place off the 2,020 level.
If price falters and retraces down from 2,020, we’ll immediately target 2,000 (a Round Number Target along with the 50% Fibonacci Retracement).
However, a breakdown (steeper retracement) under 2,000 targets the 1,965 level again.
An “Alternate Thesis” bullish breakout beyond resistance opens a pathway first toward the underside of the falling 200 day Simple Moving Average (SMA) near 2,060 and then – into the future – toward the 2,125 all-time high level.
Note the current resistance into 2,020 and trade the reaction above or beneath this key pivot level.