Downside targets for the S&P 500
Posted by Danny on August 16, 2013
Markets broke down yesterday.
This means the window for potential new highs is now going to be closed for a while.
Looking for possible downside targets, this chart can become useful (click for larger image):
The important green trend line was now clearly broken again, and this means the first support should come at the blue line, currently around 1620.
Below that we also have 1575 and 1535 as next lower targets where support is likely.
These are targets for a mild correction, which could last 6 to 8 weeks.
If the 1535 level gets broken convincingly, then a longer bear market becomes likely.
Yesterday’s drops have also sent most stock markets into decline mode on the basis of my key reversal levels.
The Nasdaq is now in decline mode with a daily key reversal level of 3634. So, a daily close above 3634 would swing it back into rally mode.
The S&P 500 is also in decline mode with a daily key reversal level at 1687.
The FTSE 100 has entered decline mode as well, with its daily key reversal now at 6591.
The DAX index remains in rally mode, and continues to do so as long as it closes above its daily key, currently at 8256.
More on the key reversals in my weekend post.