S&P 500 Technical Trading Outlook: False Moves

Like I have been saying in recent editions of my “On The Mark” newsletter, there will likely be a lot of false breakouts and breakdowns as the market traces out a bullish base.

This process takes some time and will stir some emotions as investors see false moves in both directions.

The latest of these false moves can be seen on the hourly chart of the S&P 500 Index in the form of a false breakout. We’ll look at that chart (hourly) as well as a daily chart and highlight some price levels and patterns to be aware of.  We’ll also look at a chart of the bond market (TLT).

The first chart is an hourly chart of the “500”. It shows 2 false breaks already, and what appears to be a third one with the last move to recovery highs looking shaky.

S&P 500 “hourly” Chart

s&p 500 hourly trading chart false breakout bearish_march 14

Moving to the daily chart, it’s possible that the triangle break was false, or at the very least, the “500” will come back and retest the top of the triangle.

Technical support from the triangle, the 50-day moving average, and the gap all come in between 2,740 and 2,746.

A reversal at this region could set the stage for a move back toward the old highs. However, a failure in the 2,740 zone would suggest more backing and filling before the next leg higher begins.

S&P 500 “daily” Chart

s&p 500 daily chart triangle breakout chart_march 14

A short-term pullback in stocks would coincide nicely with a short-term rally in treasury bonds, something I have been looking for recently.

On the long term treasury bond ETF (TLT), we could see a rally back to heavy resistance in the 120.50 to 122 area.

treasury bonds trading chart tlt etf forecast_march 14


Feel free to reach out to me at arbetermark@gmail.com for inquiries about my newsletter “On The Mark”.  Thanks for reading.


Twitter:  @MarkArbeter

The author does not have a position in mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.


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