The S&P500 has reached or is approaching a major level of resistance. A triple neck tie is looming, as defined by 1) the downward sloping trend line, 2) the 200 period moving average, and 3) the resistance defined by the swing high in early January. These three resistance lines come together to form a formidable barrier, blocking continuing upward momentum. The most likely outcome will be a severe and savage retracement back to one of the Fibonacci support levels of 0.50, 0.618 or even a 1.0 retracement. We believe that at the completion of this retracement the market will continue its upward move.
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