12/01/2015 7:00 am EST
By taking a technical look at the S&P 500 on Monday, though Springheel Jack, of SharePlanner.com, thinks traders will probably see a test of the all time highs before going much lower, he illustrates that the perfect bull flag channel is saying there may be a dip to buy first.
I think it's pretty obvious that we'll be seeing a test of the all time highs before going much lower, but the perfect bull flag channel on SPX here is saying that we may well see a decent dip to buy first. Key support is at 2070 and if that breaks without first seeing a break of flag channel resistance, it's still possible that we could see a test of flag support in the 2000-10 area. SPX 60min:
RUT is testing double trend line resistance here and is very short-term overbought on RSI. There are both RSI 5 and RSI 14 sell signals on the 15min chart. The obvious next move is a test of short-term channel support in the 1187-90 area. RUT 60min chart:
SPX flag resistance is in the 2093 area and a break above kills off the possible set-up for a retest of 2000. Key uptrend support is at the 50-hour MA at 2082.70. A sustained break below opens a test of 2070 and a break below 2070 opens up a retest of the 2040 area.
Monday is a cycle trend day, so there are 70% odds that either buyers or sellers will dominate the tape Monday. The volume is low, though, so that may affect the odds.
By Springheel Jack, Contributor, SharePlanner.com
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