Red lines- trading range
Last Friday SPX broke out of the trading range it was in for the last month. Yesterday price broke to new higher highs relative to Friday but soon after it turned back down. Price is entering the trading range once again. What was once resistance is now support. Failure to hold above the 3,900 support is a sign of a false break out. Traders need to be very careful. A false break out would be the perfect trap for bulls. Support at 3,800 remains key for the medium-term trend. Bulls have hopes as long as we trade above 3,800. Failure to defend this level would lead to a bigger sell off that could push SPX towards 3,500.
