Week In Review: This Is Why Supports Are Key

While downside in the S&P 500 was looking more likely last week, the charts have ironically clarified themselves a bit, relying on holding support to make its next move.

Zoom Session Tentative For Thursday

With the birth of our baby this past week, I won’t be able to have a hard set date for a Zoom session, but I’d like to make up for missing last week’s. For now, I’ll set one for this Thursday at 12:00PM ET for Founding Tier members only. The link to the session will be posted in the chat and in an article post within the hour before the session. In the session, I’ll continue to cover the rallies and look at those with actionable patterns, some with potential tops in. Join me for a learning session and Q&A.

Supports Are That Important

This market has been remarkably resilient over the last six or seven months. Since April, we haven’t seen much of a pullback, at least one that hasn’t brought about concern, even from a chart perspective. Last week, I examined how the first support level was tested, and it was looking likely to break in the coming week. However, that didn’t happen, and the market continued higher this week.

This is why support levels are so important.

Just because the S&P 500 SPY 0.00%↑ reached it, it means little until it breaks. While the structure I had showed downside being more likely this past week and that support level breaking, the market took the less probable path higher. In the end, support was never broken, so there was no higher probability we topped. I even said that last week:

In the bigger picture, we’re still only at the first support level, so I can’t confirm yet if we’ve topped.

Here’s how this development has actually cleared up some of the chart.