We have drawn a new trendline in blue from last week’s high to this week’s series of lower lows. This may serve as further resistance, but we tend to think this trendline will be broken and lead to a move higher.
Currently the trendline comes in just below 2475.00. If it is broken, our target will move to last week’s 2480.50 all-time high. That area could also offer resistance, but if not, then the next two targets would be the orange trendline at 2484.00 and the 23.6% extension of last week’s range at 2486.00.
On the other hand, if the blue trendline does hold as resistance, then we would look for a move down to the 2469.00 area, marked by the green price line on the chart. This is the area of the weekly pivot and the 50% retracement of last week’s range. If this area does not produce support, we would next look for a move down to the lower yellow trendline just above 2465.00.
We don’t put much weight on this trendline, but will focus more on a move toward yesterday’s low, anticipating support coming in at the grey shaded region on the chart between 2460 and 2463.75. If all these support levels were to fail, then the next area to watch would be last week’s low of 2457.00.
Traders should be aware that today’s calendar is very busy and that tomorrow includes the non-farm payroll, one of the biggest economic movers of the month. Some of the items to look out for today are listed below:
- Jobless Claims 8:30 AM ET
- PMI Services Index 9:45 AM ET
- Factory Orders 10:00 AM ET
- ISM Non-Mfg Index 10:00 AM ET.