S&P 500 wedges - bullish to bearish continuation
I think I figured out what's going on here.
From what I've seen, it's fairly widely accepted that we broke out of a bullish descending wedge on 9/26, which is a continuation pattern. From there, we've continued to retrace key levels from the September selloff; but in the process, have worked ourselves into another wedge - this time, bearish.
Things I don't know:
1. If we will see the sub-3300 level again in November -- this level has withstood multiple retests recently.
2. Which trend will ultimately prevail -- I suspect bullish but there are signs of the economic recovery slowing.
Things I do know:
1. We will almost certainly not retrace to former all-time highs before the election -- that would be excessive.
2. At some point, this counter-rally will stall out, and backslide a bit -- how far, only time will tell.
Personally, I think it would be healthy for the S&P to come down to its 200-day moving average around 315-320 in order to reset prior to another bull run towards new highs. However, it is perfectly possible that it may come down only a little and trade sideways election is decided.
Feedback welcomed and encouraged.
From what I've seen, it's fairly widely accepted that we broke out of a bullish descending wedge on 9/26, which is a continuation pattern. From there, we've continued to retrace key levels from the September selloff; but in the process, have worked ourselves into another wedge - this time, bearish.
Things I don't know:
1. If we will see the sub-3300 level again in November -- this level has withstood multiple retests recently.
2. Which trend will ultimately prevail -- I suspect bullish but there are signs of the economic recovery slowing.
Things I do know:
1. We will almost certainly not retrace to former all-time highs before the election -- that would be excessive.
2. At some point, this counter-rally will stall out, and backslide a bit -- how far, only time will tell.
Personally, I think it would be healthy for the S&P to come down to its 200-day moving average around 315-320 in order to reset prior to another bull run towards new highs. However, it is perfectly possible that it may come down only a little and trade sideways election is decided.
Feedback welcomed and encouraged.
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.