Red lines- bullish channel
Blue line- support trend line
SPX is starting the week trading around 4,445. The index, although it remains inside the medium-term bullish red channel and above the blue support trend line, it is vulnerable to a bigger pull back. A break below the blue upward sloping support trend line will be the signal for a deeper pull back towards the lower red channel boundary. SPX is vulnerable to a move towards 4,250 if price fails to hold 4430. The blue support trend line has been tested 3 times so far. Bulls have managed to respect it and hold above it. Price has formed lower highs at 4,539 and 4.516. As long as price remains below these two levels, we continue to expect a bigger pull back. A break above 4,540 will open the way for new all time highs in the coming months.
