SPF Testing 10-Year High / All-Time High

SP:SPF   S&P 500 Financials
SPF has fallen short of reaching its all time high of $510 in 2007 before the financial crisis. Could this be a psychological barrier for traders? The cause of the financial crisis was banks taking on risky assets and appraising them, fraudulently, as safe investments in the form of CDO's. Their mistake could have created the largest psychological barrier in the history of SPF. However, from a technical perspective, SPF has the potential to break out past all time and 10 year high levels so we do not want to ignore this possibility as traders. We want to look for a high volume breakout from the green triangle area which passes 10 year high levels. Having already formed a hard double top however, a triple top would indicate a strong bearish market sentiment and an expected move back down to the 200 EMA. If it breaks out of the triangle look for a double top to form on the 10-year high resistance, if it also surges past this level SPF will enter bullish territory with a continuation of the 2017 surge to continue. For entries, on the triple top, look for high sell volume and short at the first red candle to make a new low, set stop at high of last green. For long position, look for a break past green triangle and wait for movement around resistance levels, buy first green to open above resistance and set stop at the low of the last candle before it. Overall, this is a period of lower volatility which indicate a high volatility period to begin. To track overall S&P volatility use VIX, an initial increase in VIX can indicate volatility in SPF as well as SPX.

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