Technicals | Oct 25 2022
By Michael Gable
The S&P500 Index has managed to hold its lows and is now breaking out of this small base. By doing the work at these levels, it is now looking like we should get a relief rally from here – similar to what we saw in March and July. It is too early to be calling the recent low as "the low", but investors should now feel a bit more confident in adding long positions for the short term.
Until we get evidence of lower CPI and central banks pausing on rate rises, then any rallies need to be treated more carefully as short-term opportunities.
Today's research has a chart on the S&P500 Index.
The S&P 500 Index produced an "outside day" when it made its intra-day low two weeks ago, which was a positive.
However, that could have easily failed. The key was to observe whether we get any follow-through to the upside.
The last two days have confirmed this.
This means that we should at least get an upside move in the next few weeks. Once again, the major resistance level to watch is the 200-day Moving Average (blue line).
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