Risky times in SPX
SPX has made a good recovery after the initial drop to 2346.58 and it has been closing in green for days and even weeks. However... we, as traders, should pay attention and not waste our capital.
Things to pay attention to (bullish):
Things to carefully pay attention to.
So, as a conclusion, if the SPX manages to stay above the current support/resistance area and close above it, then we have higher possibilities of having more upwards movement. Nevertheless, the way for breaking out from the current downtrend is not easy.
Volume is not supporting us, the resistance at around $2650 area is strong and the trend is falling and there is a possibility of just making another lower high, before making another drop.
This is not a suggestion (or, in my opinion, the right time) to take a position right at this moment. If we want to go long, then we first need to make higher high. If we want to go short, then we should be patient and wait for a bit more confirmation (like a drop below the moderate support/resistance area or when the price is not willing to pass the $2650 area).
Take care, and defend your capital - it is the only thing keeping you alive.
Things to pay attention to (bullish):
- SPX is in a moderate support/resistance area. It has broken out for the moment, but in order to confirm that and expect another green candle, we also need to close above it.
- After 4 weeks of trading green, we managed to raise by ~11.5%.
- Price superbly held the 200EMA on the weekly chart, thus validating the supporting moving average.
Things to carefully pay attention to.
- We have not broken the downwards trend line, which means that this can be a dead cat bounce and market taking a breath before dropping even further.
- We have psychological round number being near the falling trendline at the $2650 area, which makes sudden upward breakout less likely.
- We have a death cross on D1 with 100 & 200 EMA, a very bad sign.
- Thus far, we have lower highs and lower lows - a classic downtrend.
- The rise was not accompanied by high volume - it is still lower than 20MA on the volume chart, showing less demand.
So, as a conclusion, if the SPX manages to stay above the current support/resistance area and close above it, then we have higher possibilities of having more upwards movement. Nevertheless, the way for breaking out from the current downtrend is not easy.
Volume is not supporting us, the resistance at around $2650 area is strong and the trend is falling and there is a possibility of just making another lower high, before making another drop.
This is not a suggestion (or, in my opinion, the right time) to take a position right at this moment. If we want to go long, then we first need to make higher high. If we want to go short, then we should be patient and wait for a bit more confirmation (like a drop below the moderate support/resistance area or when the price is not willing to pass the $2650 area).
Take care, and defend your capital - it is the only thing keeping you alive.
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