S&P 500 to reach the 3310 trendline, pullback not expected – Charles Schwab
|Ryan Frederick from Charles Schwab looks at the S&P 500 chart and though the index is above the consolidation zone again, the analyst doesn’t expect another pullback this week and thinks the index could reach the 3,310 level.
Key quotes
“The S&P 500 has moved back into consolidation mode again, which is frankly just fine with me. At the close Thursday (6/18) the index had gained back just 2.4% and it is about 9.6% below the 2/19 all-time high. I was comfortable with the rebound off the 3/23 lows, until it broke out of the consolidation zone on 5/26. At that point, it became too bullish and inevitably set up the pullback that happened on 6/11.”
“While the S&P 500 is currently above the consolidation zone again, I won’t be too concerned about another pullback until it approaches the trend line at 3,310 or so, though a pause at the 6/8 high (3,232) on the way, would not be surprising. For now, technical traders should continue to watch for the first downside support at the 200-day SMA (3,018).”
“It may be just a coincidence that the S&P 500 fell exactly 7.1% from 6/9/20 - 6/11/20 since it also fell exactly 7.1% from 6/15/09 - 7/10/09, before rebounding. It was certainly quicker this time, but then again, so was the bear market that preceded it. However, you look at it, so far 2009 has served as a reliable roadmap for 2020. Whether this pattern continues for the second half of the year remains to be seen.”
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