Can't say that the sharp pull back on Friday was something I was expecting, but since S&P is not breaking important support levels, then I will not put all my money in short positions. The market topped as expected at the area of 1390 and made a sharp decline towards 1355 still inside our upward trading range channel. A new high at 1394.16 has not changed anything to our strategy. The rise still looks choppy but at least the market does not fall. Unless support levels are broken, be on high alert of strong pull backs. 1354 is now a level that bulls don't want to break. It is not as important as 1325, but if broken could accelerate a decline below 1325.
Taking a look at the weekly charts, the index looks like it can hold its support levels. The big pitchfork still holds prices in with an upward angle but with lots of volatility. The lower pitchfork support if broken could be another bearish sign. If it holds, the market can make new highs towards 1500.
Our simple EMA system also confirms this potential bullish view that 1500 could be achieved by the end of the year. It is a lagging indicator, but I always take it under serious consideration when trying to forecast large moves. Combined with elliott waves is a very usefull indicator.
If you want help and more in depth analysis for trading this index, don't hesitate to contact me. Thank you for taking the time to read my post.
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