S&P 500 index funds has a characteristic, once the value breaks support of uptrend line it makes a steep downturn for a short period. Right after down movement, a new uptrend rally starts.
Let’s see a few examples, look at the green uptrend lines
In the short term we have two scenarios;
1. Green Arrow;
If the value bounces from the 2914 support or from green uptrend line arouond 2900’s, new target will be the resistance of 3030 which is all time high (ATH) btw. If it also breaks the ATH 3030 resistance, we have to look at other formations to form a new target.
My Opinion: It would be very hard to break the ATH with such short uptrend line. Trend would not be so powerful but this also can be a silly idea as well.
2. Red Arrow; (higher chance in my opinion)
If it breaks the support of 2914 and green uptrend line, we may see a longer downtrend period. Than our first target would be 2862 and than 2733. After the bounce back we can start a new uptrend to break the all time high 3030 resistance. And this time the uptrend line will be more powerful and will have more chance to break the resistance.
As a result, even it has some down movements general momentum of S&P 500 index is very powerful.
Let’s see a few examples, look at the green uptrend lines
In the short term we have two scenarios;
1. Green Arrow;
If the value bounces from the 2914 support or from green uptrend line arouond 2900’s, new target will be the resistance of 3030 which is all time high (ATH) btw. If it also breaks the ATH 3030 resistance, we have to look at other formations to form a new target.
My Opinion: It would be very hard to break the ATH with such short uptrend line. Trend would not be so powerful but this also can be a silly idea as well.
2. Red Arrow; (higher chance in my opinion)
If it breaks the support of 2914 and green uptrend line, we may see a longer downtrend period. Than our first target would be 2862 and than 2733. After the bounce back we can start a new uptrend to break the all time high 3030 resistance. And this time the uptrend line will be more powerful and will have more chance to break the resistance.
As a result, even it has some down movements general momentum of S&P 500 index is very powerful.