S&P500 | Price Action Analysis!
Hi,
Quite "interesting" times ahead, yes? Over a long period of time, I would like to paint a technical picture of the S&P 500, let's analyze it a bit. Lately, the price has printed some bearish signs and possibly it's not over yet but it depends on some breakouts.
Let's start from the beginning. The first bearish sign came in after the 20th January Daily candle close. After that, the long-lasting higher highs and higher lows got broken. Later the fall continued, plus the price pushed it below EMA200 - also haven't seen it since the end of May 2020.
So, technically we got that "alert" at end of January but let's look further. After the price of SPY traded some days below EMA200 it got a bullish volume from the previously worked support level but the volume wasn't strong enough to push it above the strong area around 4550. Another sign that bulls are weak - lower high was printed around 4550. Basically the current price of S&P trades between the two strong areas: resistance ~4550, support ~4300. S, if anybody searching for breakout possibilities then these levels should be on your watchlist.
The price is approaching a lower price level and the overall short-term tendency is bearish so let's observe a support area around 4300 and what will happen if the Daily candle gets a close below 4.3k.
A Daily candle close below the prementioned price level will activate a bearish shart pattern called Head & Shoulders. In general, I'm not the biggest fan of chart patterns but if I do analysis then I use them to get a bit more information from the market. So, it will trigger the bearish chart pattern (candle close below the H&S neckline), it will print a new lower low and the strong area has been broken.
Considering H&S target (Target = from Head to the neckline, copy/paste, neckline to target - shown with white dotted lines), considering channel projection, considering the waves of AB=CD then it should be land around 4000. Inside the marked landing zone is also the 20% slump from the AHT. "Officially" the SP500 price is on the bearish market after it has seen at least 20% correction. Considering correction at the end of 2018, then it will also act as a support - bounced back up after a 20% drop from the top.
SUMMARY: We have seen some bearish signs, a Daily candle below 4,3k will bring it more so be patient and if you want to enter in some certain stocks then do it partially. Do not put all-in in one price level because, as said previously, the times are interesting. If the price reaches around my shown landing zone then it would be great to start building your positions from there but still, be cautious!
To end it with a positive tone in mind then a bullish breakout would be a Daily candle close above 4600 ;)
Regards,
Vaido
Quite "interesting" times ahead, yes? Over a long period of time, I would like to paint a technical picture of the S&P 500, let's analyze it a bit. Lately, the price has printed some bearish signs and possibly it's not over yet but it depends on some breakouts.
Let's start from the beginning. The first bearish sign came in after the 20th January Daily candle close. After that, the long-lasting higher highs and higher lows got broken. Later the fall continued, plus the price pushed it below EMA200 - also haven't seen it since the end of May 2020.
So, technically we got that "alert" at end of January but let's look further. After the price of SPY traded some days below EMA200 it got a bullish volume from the previously worked support level but the volume wasn't strong enough to push it above the strong area around 4550. Another sign that bulls are weak - lower high was printed around 4550. Basically the current price of S&P trades between the two strong areas: resistance ~4550, support ~4300. S, if anybody searching for breakout possibilities then these levels should be on your watchlist.
The price is approaching a lower price level and the overall short-term tendency is bearish so let's observe a support area around 4300 and what will happen if the Daily candle gets a close below 4.3k.
A Daily candle close below the prementioned price level will activate a bearish shart pattern called Head & Shoulders. In general, I'm not the biggest fan of chart patterns but if I do analysis then I use them to get a bit more information from the market. So, it will trigger the bearish chart pattern (candle close below the H&S neckline), it will print a new lower low and the strong area has been broken.
Considering H&S target (Target = from Head to the neckline, copy/paste, neckline to target - shown with white dotted lines), considering channel projection, considering the waves of AB=CD then it should be land around 4000. Inside the marked landing zone is also the 20% slump from the AHT. "Officially" the SP500 price is on the bearish market after it has seen at least 20% correction. Considering correction at the end of 2018, then it will also act as a support - bounced back up after a 20% drop from the top.
SUMMARY: We have seen some bearish signs, a Daily candle below 4,3k will bring it more so be patient and if you want to enter in some certain stocks then do it partially. Do not put all-in in one price level because, as said previously, the times are interesting. If the price reaches around my shown landing zone then it would be great to start building your positions from there but still, be cautious!
To end it with a positive tone in mind then a bullish breakout would be a Daily candle close above 4600 ;)
Regards,
Vaido
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