The S&P 500 is testing trend line support as it pulls back to the 50 and 200 day moving averages. Today, volume popped and prices closed just below the middle of the range.
Overall, things are looking bearish after we failed to move above a previous level of resistance as seen in the following chart:
The resistance and support are converging, creating a turning point.
Despite the slight jump in volume today, we have seen the market drift with only one day of above average volume in the month of July. Another interesting point is that this is the first time since April that the S&P has spent more than a couple days above the 50 MA.
It’s worth noting that we could possibly be seeing an inverse head and shoulders pattern:
A possible pattern forming is the inverse head and shoulders.
If we get a boost higher off the moving averages, this could be a legit pattern and we could see the head serve as a bottom. Check back for more.
You also might enjoy:
About Author
