Wedge Forming
Updated
Now is looking like as good a time as ever to enter long. Can this wedge play out longer, and create lower lows? Sure. Here''s the case against that:
Fib Retracement:
335 is the 38.2 retrace zone...
Also the area is a point-ish shy of the Dec. 208 lows. It's a heavy support zone as, most bear markets see a bounce here.
Here's a shorter term wedge forming in futures:
The very first chart we posted shows that money flow is making higher lows. Typically that is seen when a reversion is coming shortly. It isn't going to tell you when the temporary bottom/top is in, but it is a warning sign that flashes a signal saying a reversion is coming soon.
Acc/Dis is also making higher lows:
RSI Bullish Divergence:
The one thing to note though is that this pattern can play out down to the next 223 target:
Potential Wave Setup:
*NOT Trade Recommendations, Always do your own analysis first!*
Fib Retracement:
335 is the 38.2 retrace zone...
Also the area is a point-ish shy of the Dec. 208 lows. It's a heavy support zone as, most bear markets see a bounce here.
Here's a shorter term wedge forming in futures:
The very first chart we posted shows that money flow is making higher lows. Typically that is seen when a reversion is coming shortly. It isn't going to tell you when the temporary bottom/top is in, but it is a warning sign that flashes a signal saying a reversion is coming soon.
Acc/Dis is also making higher lows:
RSI Bullish Divergence:
The one thing to note though is that this pattern can play out down to the next 223 target:
Potential Wave Setup:
*NOT Trade Recommendations, Always do your own analysis first!*
Note
Another test, for the time being, a false break...
My current two cents on the market:
The crash selling has faded. In a crash everything gets sold, over the past couple of days, we've seen Gold...WMT...KR...ABT..MRK...start to outperform the market It's a sign that people are going from panic selling everything, to putting money back to work, even if it is safety names.
Could we see 223 still? Sure, but I think we're in the "casual investor" phase. The phase where things are going so bad, they think its time to get out. Just like when things are going so good (January 2018 for example), they think they need to hurry up and get in. Meanwhile smart money is finding good opportunities to go long right now.
Note
Shorter term SPY trend:Note
AAPL might be the most bearish signal of them all for me right now. Really would like to see it hit 233 (2018 highs). That should bring a big bounce. Leaders lead....Note
2015/16 highs could still get hit as well. That's a 6% sell-off from here, compared to the 20% bounce target. Risk/reward, tagged on with the fact of the matter being, a major pivot area like 233 will always get retested, before a hard sell-off continues. I'll take my chances here all day.
-Add slowly
Just some things to keep in mind, as the people who have been calling for the "world to end" for 5 years, voices are the loudest right now...
Note
Resolution should come today....Note
If this is indeed a flag forming here, a 20 point move (200 in es) is implied on the break. Key to watch, because such a move upward would break the interim downtrend and the wedge currently forming.
Note
Breakout retests occurring. Going to want to see this hold into the close...
Note
Big break....lots of green grass ahead, but it needs to retest, and its Friday. There's been no signs of pandemic slowing, so it remains risky to hold over the weekend.
Note
The test...Note
Another attempt at a wedge break, looking for a 227 successful trend retest:It's hard to not see the bigger picture here though:
The megaphone trendline is sitting around 207-208. All it takes is for the SPY to stay within this wedge pattern for two more days, with a minor break to the downside to hit that target.
IMO, Trump gave the markets what they ultimately wanted to hear last night. That being the door is open for re-opening businesses even if the virus isn't under control. That's why a successful retest can happen here, with a further rally....BUT
---Fading for one or two more days down to the larger megaphone trendline has to be an option. An option that I think would see a major rally because if all the following happen:
1. Macro-trend technical support
2. Trump opening businesses back up will relieve uncertainty.
3. The fed is pouring more money than ever into markets.
4. Huge stimulus package is on the horizon.
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