S&P broke down from it's weekly broadening "pennant" decisively last week after Powell gave another blow to the markets ("don't fight the FED" resonated with a resounding punch to the hopeful bulls, ouch!).
It is now near June's low (point C) and pretty oversold in the near term. Hence a short bounce from here is possible but there is likely a lot less conviction for a sustainable bounce this time.
Should we break June's low in the coming days, then the next support is around 3400-3500 where we have a conflucence of:
1. 50% fib retracementand of the major AB swing up and
2. 127% fib extension of the recent CD swing up
However, I won't rule out a worst case scenario where market might not bottom until around 3200 where we have a conflucence of:
1. 61.8% fib retracement of the major AB swing up and
2. 161.8% fib extension of the recent CD swing up
3. horizontal resistence turned support @ 3200
This is just a technical prediction and by no means guaranteed. The market is fluid and Economic situations (& Powell) could change along the way and until we see a clearer sign that the bottom could be in, it is safer not to catch a falling knife unless one is an asttute short term trader or an ultra long term investor.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
It is now near June's low (point C) and pretty oversold in the near term. Hence a short bounce from here is possible but there is likely a lot less conviction for a sustainable bounce this time.
Should we break June's low in the coming days, then the next support is around 3400-3500 where we have a conflucence of:
1. 50% fib retracementand of the major AB swing up and
2. 127% fib extension of the recent CD swing up
However, I won't rule out a worst case scenario where market might not bottom until around 3200 where we have a conflucence of:
1. 61.8% fib retracement of the major AB swing up and
2. 161.8% fib extension of the recent CD swing up
3. horizontal resistence turned support @ 3200
This is just a technical prediction and by no means guaranteed. The market is fluid and Economic situations (& Powell) could change along the way and until we see a clearer sign that the bottom could be in, it is safer not to catch a falling knife unless one is an asttute short term trader or an ultra long term investor.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
Note
There is a potential bullish divergence on the weekly chart, which increases the odds of a bounce coming within the next week or so, perhaps when S&P500 plunges into the 3400-3500 support zone. However, any near term bounce may still be short term, considering that the bigger trend is still bearish. At the moment, no signs of capitulation.
Not many of the stocks that have broken up from basing patterns earlier have worked out well. It's probably best to wait out a little longer before bottom fishing or test with only small positions (pyramid up if the trade continues to work but with trailing stop loss in place).
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
Note
Nothing much has changed on the weekly chart despite the major pullback last Friday. Bullish divergences still valid for now With more economic reports coming out from Wed to Friday I guess we will know by then if S&P will go much lower (or not). Near term support at 3400-3500. However that said, there is no hurry to pick bottoms. For those inclined to do so, only small "test-water" positions now, and only on stocks with promising technicals.
Note
Near Term "capitulation"?
Looks like the S&P finally hit into the near term support zone (3400-3500) and staged a strong rebound (bullish engulfing candle) and with bullish divergence on the daily chart
Right on cue, a number of the heavy weights have hit or were close to significant supports today before stagging a reversal. Have we bottomed or is this still a short term rally? We won't know for sure. However what is probably clear is that this rally could be have some legs. Volatility is likely to be still significant hence exercise caution.
Note
Oops! While Thursday's very bullish (engulfing) candle gave hope of a possible capitulation with a potential weekly pinbar in the making, the "fire" was quickly put out by Friday as S&P gave back 61.8% of this "bullishness" that started on Thursday.
The support @ 3500 is still holding right now, but it's still a very much risk-off / choppy environment. Any bounce is probably still short term until we can see convincing signs that the bottom may be in.
p/s with heavy weights like TSLA and NVDA continuing to show weakness, it is likely to weigh on the index. An observation is that Financial sector appear to have better relative strength to the tech sector, meanwhile continue to wait and see.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.