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.
“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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