Updating the Trading Range Levels in the SP500

The 2015 Trading Range continues for the market as prices fell once again to challenge key support.

Let’s update our “Range Forecast” Chart of the S&P 500 key levels and plan accordingly.

S&P 500 Daily Chart

January 2015 started with a wide range (1,990 to 2,060) ahead of a rally straight up to the 2,120 level.

From there, buyers and sellers have aggressively battled each other with neither side gaining ground.

With the exception of January, the S&P 500 has traded within a sideways range (Rectangle) for 2015.

With the exception of two “spikes” out of the Rectangle (March and June), and three small “Bull Traps” above 2,120, price has bounced between the 2,075 and 2,120 levels.

The 2,100 Level is the “Magnet” or Midpoint of the pattern which should be seen as a Balance Price.

In other words, each time price rallies above or beneath this level, it is “snapped back” quickly.

For short-term traders, we should continue focusing our attention on these three levels:

  • 2,120 and 2,130 (Range and Price Highs)
  • 2,100 (Magnet or Midpoint)
  • 2,075 (Lower Support and now 200 day SMA)

Here’s a clearer “Price Only” perspective of the range boundaries:

S&P 500 Daily Chart

For trading plans, a movement down under 2,070 targets the 2,050 level; a movement under 2,040 opens a larger retracement or sell pathway back toward 2,000.

Otherwise, any future strong, impulsive breakout above 2,135 suggests a short-squeeze outcome and continuation of the ongoing bull market trend.

However, while price remains balanced within this range, we’ll plan swing and intraday trades based on movement toward or away from these reference levels.

For more daily updates from Corey, visit his blog at Afraid to Trade.com.