S&P 500 - Megaphone
Updated
Even though S&P had high volume on the buys last week, it seems to be only surface level deep. We are seeing bearish divergences in MACD and higher volume on sell days indicating continuous distribution. In addition, some signs of bullish exhaustion. With 10 yr rates elevated QQQ will continue to be rangebound and add more gravity to SPY price action. There are a few scenarios which could play out:
1.) Likely, trading within the megaphone pattern over the next two weeks
2.) Blow off top to 4000+, also likely with new stimulus money inflows, market shenanigans, or overnight futures pumps. However, it might be short lived, the price action is a little thin in the 390's
3.) Quick breakdown to 372 region to test the trendline then blast back up to a new high.
All in all, we could print a large head and shoulders pattern over the next few weeks then see some big selling if key levels of support are broken.
1.) Likely, trading within the megaphone pattern over the next two weeks
2.) Blow off top to 4000+, also likely with new stimulus money inflows, market shenanigans, or overnight futures pumps. However, it might be short lived, the price action is a little thin in the 390's
3.) Quick breakdown to 372 region to test the trendline then blast back up to a new high.
All in all, we could print a large head and shoulders pattern over the next few weeks then see some big selling if key levels of support are broken.
Comment
Well, we know what happened! Rocket to the moon. It could take some time for a retrace to play out but on declining volume we are starting to see the bear coming out.
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