Connect with us

Hi, what are you looking for?


Isn’t That Beautiful?

Yes, Technical Analysis can be (very) subjective at times. Different (types of) investors, interpret charts differently. And also Yes, more quant-based technical approaches can make interpretation of charts or time series less subjective. Personally, I am probably somewhere in the middle of the spectrum.

BUT, looking at the chart of the S&P 500 index at the moment I have to admit to myself that from time to time it is amazing how well a market responds to all these “subjective” support and resistance levels.

Anyone who has studied some Technical Analysis 101 will very likely have picked up two “rules” or “assumptions” if you wish.

Old support comes back as resistance (and vice versa)Gaps must be/are often filled

The chart of the S&P currently shows a lot of that.

First, we have the support line around 4175 that was broken at the start of May and then acted as resistance after the rally back up after the initial decline. Then in the first half of June, the newly formed support around 3900 was broken and that level is now serving as resistance again in the past three days.

The decline out of the 4177.51 high is showing two down gaps. The first was on 10 June between 4017 – 3974 and the second one was on 13 June between 3900 – 3838. The latter was closed on 24 June after which the market formed a new (lower) high and came down again.

Closing that gap and testing old support as resistance came after setting a new (lower) low near 3636 a little over a week ago. In that move up another gap, upward this time was formed on 24 June between 3802 – 3822. That gap was closed today which makes it very interesting to see what will happen from here.

When the market continues to slide lower, the next target can be pegged around 3636 where the most recent low was formed. When we bounce upward from this gap support it will be a small sign of improvement.

Given the dominant trend being downward I am still more leaning towards at least another test of support in the 3636 area in the near term.

Whatever happens, market and investor behavior around these old peaks and troughs never ceases to amaze me.

My regular blog is the RRG Charts blog. If you would like to receive a notification when a new article is published there, “Subscribe” with your email address.

You May Also Like


The head of the International Monetary Fund has warned of increased risks to the stability of the financial system after weeks of banking sector...


After taking a breather in the week before this one, the Indian equity markets resumed their up move. The headline index continued with its...


It was supposed to be a debacle. As the Second World War drew to a close, the nation’s leading economists feared that, once the...


Small businesses are bringing forward their finance applications in order to beat expected further interest rate rises, according to new research. Four-in-ten (44%) SME...

Dislaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2023 | All Rights Reserved