CFDsPros S&P 500 Outlook

[CfdPros]

CFDsPros S&P 500 Outlook

The S&P 500 Index, Dow Jones and NASAQ COMPQX all finished at new 52 week highs this week. Strong buying right into the close of trading ended the day, week and approximately the last 20 months on their highest notes.

While the aggressive trendline which began in February was ?threatened,? the S&P at no point closed below it. Following the Goldman Sachs news it looked like there may be some follow through selling the next day, but the market managed to move higher on that day putting in a long ?wick? on the candle and managing to finish right on the trendline.

Even if the line was drawn slightly differently, taking profits or exiting trades was not a bad idea on the Goldman news or the following Monday. The failed breakout, and move back higher provided entry back into the market on the long side this week (if you trade on this time frame). Longer term investors should only be looking at the dominant trend, as fluctuations always occur.

The dominate trend remains up, and right now there is the aggressive trend (I have added a ?redrawn? trendline to accommodate the recent price action) and the main trend. When the aggressive trend breaks the pullback is likely going to be to the main trendline. A break of the main trend line is what signifies a full reversal?.and that is a long way away at the moment.

Last weeks analysis did not provide much in the way of profit targets, it more so looked at the global stage and how the Goldman situation may affect the downside. The downside did not develop and upside target from two weeks ago remains in play: 1225 on the S&P 500. The index closed the week at 1217.28. A target beyond 1225, should the market continue to move through that level, is 1245.

The average weekly movement for the S&P 500 index is 31.78. Keep this in mind when considering stops and profit targets for the week.

Cory Mitchell, CMT
Vantage Point Trading

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Analysis written by Cory Mitchell for

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Risk Disclosure:
Trading on margin involves high risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you before deciding to trade you should carefully consider your investment objectives, level of experience, and risk appetite.
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