 Hello and welcome to the chart of the week video with me David Madden. Today's date is Thursday the 7th of February 2019 and the time has just gone 1120 GMT. This week's chart of the week is the S&P 500 and start off what we'll do is take a look at the wider view and if we draw a trend line between the lows of February 2016 with the lows of November 2016 We get this trend line along here And as we can see when we zoom in this trend line was well respected In both October and November at the back end of last year We did see some consolidation in around the trend line in mid-December and then followed by a sharp sell-off But since that since then we've seen a fairly decent bounce back in the S&P 500 And we can see that when the market was bouncing back in late mid to late January it ran into resistance At the trend line the previous trend line support Briefly began to act as trend line resistance and now the market has moved back above the trend line again So we can see that this particular line is significant It acted on support notifications briefly acted as resistance and now could be acting as support yet again So this price this trend line here which comes at the play in around 2680 85 in that region that's likely to be an important metric going forward If the S&P 500 can hold above that particular price the next year to keep an eye for to the upside Will be this red line here, which is the 200 a moving average which comes to play at 2744 and if you go beyond that the next year to keep an eye for will be the psychologically important 2800 and should we go beyond that keep an eye for this area here. It's in around 2815 820 2817 this region here we can see on at least three occasions This this area active resistance Once in October in November and also December so this area is going to be potentially a big stumbling block Will this be the area whereby the S&P potentially rises up to and then retreats from I want to break But I'm actually think look to shake off the recent downward trend over the last few months And I should look to retest the recent the all-time highs that were achieved back in October So I think 2817 as call it is going to be a big area for the S&P 500 If the market does manage to actually run on a steam and drop back below this trend line and show that trend line Active resistance once again. We could see the market drift lower And we could see the market head back down towards this blue line here a 50 moving average which comes into play 2614 and if you drop below that we could see the support coming to play in around the 2600 area. It's been an area of both kind of resistance that support recently It's also a big number and if you have a size of a break south of 2600 that could pave the way for further losses and it could bring us back down towards 2500 or 2438 If you are going to be trading the S&P 500, it's a good idea to keep an eye for what's going on on the Dow Jones Dow theory tells us that the stock market averages must confirm each other and If you take a look at the Dow Jones, and if you draw a trend line between the lows of February 2018 with the lows of April and May 2018 We get this trend line along here And you can see at the price action was fairly similar to the S&P 500 for buy There's consolidation in which it was supported reasonably well in October and November last year There's consolidation in mid-December Then there was a sharp break below and a subsequent bounce back and that notice how the Dow Jones is also above its respective trend line So that theory tells us that the average is must confirm each other and while both stock market Indices are above their respective trend lines We can become more confident at the market at the markets are going to remain are going to remain above those trend lines and push higher Should we see one above and one below? That's a bit of a mixed signal and we'd be less confident and on top of that Should we see both stock market indices fall below their respective trend line? The respective trend lines I would suggest I would suggest that we're more likely to see further downside moves in both markets If you have any comments to make on this video or any of the other videos we've made here at CMC markets Please feel free to never review on good reviews. Thank you very much