SPX 500 17 March Market Analysis

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  • The weekly candlestick closed in its upper half with a long tail below.
  • The market formed a parabolic wedge (3 pushes - 28 Feb, 7 Mar, and 13 Mar). That increases the odds of a minor pullback.

  • The bulls want the market to form a 2 legged sideways to up pullback.
  • They need to create credible buying pressure - consecutive bull bars closing near their highs.
  • Until they can do that, traders may not want to buy aggressively.

  • The bears see any pullback as minor. They expect at least a small second leg sideways to down to retest the Mar 13 low.
  • The 9-bar bear microchannel on the daily chart and the 4-bar bear microchannel on the weekly chart increases the odds of sellers above the first pullback.

  • For now, because of the climactic selloff and parabolic wedge, the market may try to form a minor pullback.
  • Traders will see the strength of the buying pressure. If it is strong, they may look for a retest of the breakout point - Jan 13 low.
  • If the pullback lacks follow-through buying, the odds of another leg down increases and traders will sell the pullback.

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