The Market is down 6 weeks in a row. It has not been pretty. If you’ve been on the short side, congratulations. If you’ve been on the long side, I hope you have been managing your risk appropriately. Moving forward, there should be a nice tradable snap-back rally coming at some point. Soon? Probably, but only time will tell. Here is a short-term daily chart of the S&P500:
We are sitting at around the 50% Fibonacci retracement of the most recent rally that began late last year. In early to mid-January this 1270-1280 level was a key level of Resistance that then became Support. In Mid-March, these levels were broken for a couple of days only to quickly recover. This snap-back took the S&P to new highs in a vicious six week long rally. There is evidence that this area could hold but price has not proven anything to us yet.
Going down a little further, it appears like this 1250 area is the next stop if current prices cannot find support. Here we have a rising 200 day moving average, the March lows, and the 61.8% Fibonacci retracement all clustering at these prices. If (when) the S&p500 is at or near these levels we want to look for some divergences on the intraday charts and some sign of a bottom in price that would set us up for a nice risk vs reward trade.