Markets Trending Range with Support and Resistance

Yesterday the markets closed lower and this morning the pre-markets are again looking weak. I wanted to look at the charts to review the support and resistance levels.

S&P 500

The price is still above both the 10-day and the 20-day moving averages. Also, the 10-day is above the 20-day moving average. So, per my system, the S&P 500 is trending short-term bullish. The question is for how long.

The S&P 500 closed at 3854.43 yesterday. That is very close to the lower line of the wedge formation I have marked out in the chart above. There is also a support line at 3835.58. So, are those 2 levels going to hold or will the price pierce down through them? Today’s market action may give some indication.

NASDAQ 100

The NASDAQ 100 (I use QQQ) is similar to the S&P 500 when it comes to the price comparison against the moving averages. The price is above the 10-day and the 20-day, and the 10-day is over the 20-day moving average. So, the short-term trend for now remains bullish.

Drawing the lines to create the wedge formation, I can see that the price had moved over the upper line of the wedge formation and now has settled back. So, the trending is similar to the S&P 500, but the NASDAQ 100 showing more of an inclination to go up. In the end, both the S&P 500 and the NASDAQ and the NASDAQ 100 will move similarly. It is a question of who leads who higher or lower. Today’s market action will be interesting.

Conclusion

The short-term reversal in the markets could end up being really short-term. Certainly, all the market pundits and the experts are calling for stocks going lower in the near-term. I will continue to follow price trending and the indicators to make my decisions and take actions.