Don't underestimate the bulls - SPX higher first
Updated
We are in a bear market, and the upwards corrections are often very aggressive. We have seen massive up move from 3750ish towards 4100, showing exactly that.
We see market taking a breath now, but earlier SPX broke out of the falling channel and - as indicated by the green boxes - buyers are in control and they aren't tired yet.
RSI is clearly trending up but not in the strong overbought area yet.
Looking at the chart we can see the falling trendline coinciding nicely with the 200 daily SMA, which is a perfect target where bulls might show exhausted, we reach overbought RSI, and hit double resistance(sma and trendline). This is also close to the 0.618 fib level.
I am definitely bearish in the longer term but I am convinced we will push a bit higher up before we go down. The fact that we have horizontal resistances around 4150 from the highs end may/ early june, is just not enough to sell now.
We are at levels where I would not per se buy, but it's definitely NOT the area to sell.
We see market taking a breath now, but earlier SPX broke out of the falling channel and - as indicated by the green boxes - buyers are in control and they aren't tired yet.
RSI is clearly trending up but not in the strong overbought area yet.
Looking at the chart we can see the falling trendline coinciding nicely with the 200 daily SMA, which is a perfect target where bulls might show exhausted, we reach overbought RSI, and hit double resistance(sma and trendline). This is also close to the 0.618 fib level.
I am definitely bearish in the longer term but I am convinced we will push a bit higher up before we go down. The fact that we have horizontal resistances around 4150 from the highs end may/ early june, is just not enough to sell now.
We are at levels where I would not per se buy, but it's definitely NOT the area to sell.
Note
Exactly as expected. We are now overbought on daily RSI, testing 200 daily SMA and falling trendline. Don't just sell yet. The bulls are too strong. Expect breakout after some consolidation and aim for 4450-4500 range.
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