S&P 500: Recapture the trend channel – UBS column

Review: The S&P 500 has only known one direction since its low on September 24 at 3,209 points: north. With several gaps in the upward trend, the index rose to over 3,500 points the day before and reached the daily high of 3,549 points. At the close of trading, the S&P 500 was still listed at 3,534 points and thus back in the rising trend channel. However, the index is currently also very overheated and in retrospect is very far from its 10-EMA. A look at the weekly chart also shows that the S&P 500 is only just below the Fibonacci fan at currently 3,570 points. The S & P500 had previously ricocheted down on this Fibonacci fan and started a correction.

Outlook: The upward trend in the S&P 500 is clearly intact, but after the rapid price increase the index is moving in very thin air and also below a massive resistance area.

The short scenarios: The S & P500 is running out of breath after the sharp rise in price. On the upper Fibonacci fan, the index had repeatedly bounced downwards in August, February and January 2018. It is unlikely that a breakthrough in the form of the numerous lower price gaps will succeed here with this shaky foundation in the background. At the latest in the range of 3,570 points, the S & P500 should initiate a correction and close the next lower price gaps.

The long scenarios: The S & P500 can stay in the recaptured trend channel and set course for the Fibonacci fan at 3,570 points. Above that, the high of September 2nd could be approached at 3,588 points. If it goes even higher, the 3,600 point mark is waiting first. If the bulls make a breakthrough here too, the next long-term target would be the upper limit of the rising trend channel in the range of currently 3,830 points.

Disclaimer: The text is a column of the UBS. 4investors is not responsible for the content of the column and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!

At a glance – chart and news: S&P 500


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