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S&P 500 Surges above 1,900

There we go! The S&P 500 surged above 1,900 this morning!

 

By Corey Rosenbloom

However, is this the start of a new bullish breakout swing or just another bull trap in an ongoing downtrend?

Let’s chart the breakout – note the hidden resistance above 1,900 to watch – and put it all in the context of today’s Federal Reserve announcement yet to come.

A quick glance at the chart above shows the ongoing downtrend and possible short-term reversal for the S&P 500(NYSEARCA:SPY).

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A V-Spike Pattern thrust price higher on January 20th and price fully traded up – as expected – toward the 1,900 level.

We’re seeing price pierce 1,900 and impulse higher but let me draw your attention to the “hidden” resistance.

The 38.2% Fibonacci Retracement level – a target which is serving as resistance at the moment – is 1,915.

If we objectively plan the short-term future, we’ll be aggressively breakout bullish above 1,915 (target 1,950) and otherwise neutral between 1,890 and 1,915.

We’d open a bearish short-sell pathway underneath 1,890 (targeting at least 1,850).

Keep these simple levels in mind as we await the Fed’s “We’re Not Raising Rates Anytime Soon” announcement.