The Most Important Trendlines In The World Are Being Tested Today

Brean Capital technical analyst Frank Longman released a note this morning that was straight to the point. According to Longman, the “most important trendline in the world may test today.”

The Line

Longman is referring to the support line for the S&P 500 that has been in place since the index’s 2011 lows. Today marks mark the third time the line has been tested since 2011.

In addition to noting the possible test, Longman points out a handful of other technical observations on the S&P 500 chart. He points out the double top that the index recently put in at 2026.

If the 2011 support line is breached, the next possible line of support could be the Fibonacci support level from the October 2014 low at around 1850.

Gartman Weighs In

In Friday’s edition of the Gartman Letter, Dennis Gartman focuses on a similar support line for the Nasdaq, and he doesn’t sugar-coat the importance of the support line holding. “Keeping things simple, this trend line simply MUST hold or if it [does] not then we’ve begun a bear market and we hate bear markets; they are no fun,” Gartman writes.

Where Do We Go From Here?

Gartman paints a very bleak picture of where he believes stocks will go from this point forward.

“We fear that support in the longer run lies a very, very long way below where the markets are today and we do indeed fear that things are [going] to become very ugly and remain so for a rather disconcertingly long period of time,” he warns.