S&P 500 from a Technical Perspective

SPX Square root (2)

From a purely technical perspective, there are a couple things that I’m keeping my eye on in regard to the S&P 500. This chart represents raw price on a daily chart with no indicators or oscillators. As you can see from the chart above,¬†we are looking at a “Square Root” formation where there’s a low then a higher low and a second touch at the higher low. This formation is shown by the red line and blue arrows. Typically, this indicates another drive higher. In addition, the higher lows retraced to 75% of the lower low. This is where it found support. Last, the last candle you see on the chart is a Hammer Candle, which is typically a bullish candle. We closed at the top 1/3rd of the hammer candle’s range. All of these factors show me that there’s a good chance the S&P 500 will move higher from here. In addition, the risk/reward on this trade is pretty darn good.