S&P500 Index 4H Chart 10/15/2012 10:20AM EDT
Rising trendline: When the S&P 500 high 1420 and bounced up during the 10/15 European session it was respecting a rising trendline that goes back to May 2012, as seen in the daily chart. This is a much more important trendline than the one seen in the 4H chart.
Breakout scenarios: The break above the trendline holds off the double top, scenario, and a break above 1450 could be a sign of bullish continuation. Looking at the daily RSI, it would be holding above 40, and show bullish momentum intact.
Only a break below 1420, clearing the rising trendline and validating the double top is a sign of topping, or a significant correction in the short to medium term.
Bearish target: Looking at the daily chart, we see that at 1394-1395, we have a previous consolidation support and the 38.2% retracement. This coul be a short-term target for a break of the noted support factors.