Stocks
by Alex Davies on October 30, 2018

S&P Analysis – a reversal in sight?

S&P 500 has exhibited quite a volatility in the last couple of weeks. The index is reacting to the political and economic uncertainty around the world and establishing new lows and highs. About two weeks ago, the S&P 500 was exhibiting bearish signs but it still managed to stay above the support lines, which led us to believe that there was no cause to take the movements as a sell signal. The movement pattern created a V-shape reversal, which is not unusual for indices of this type. Consequently, there was no reason to be bearish. Nevertheless, the price crossed the support lines from above and plummeted.

S&P Analysis - is there a reversal in sight?

As of now, the price movement is exhibiting a correction equality pattern, which is outlined in blue. We expect the correction to have about the same depth as the one at the beginning of 2018, also outlined in blue. According to this logic, there might be a reversal in sight, but we expect the index to continue dropping until it reaches the support line at 2555 points, shown in yellow.

By Alex Davies

Alex Davies is a long-time trader with a background in statistical analysis. Davies has worked as a financial analyst since 2014 and has been writing technical analyses for various publications since 2015. Davies writes on different financial instruments including stocks, cryptocurrencies and currency pairs.

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