S&P bears attack, bulls still hold
Updated
Last week was marked by the aggressiveness of sellers and the resilience of buyers. On Monday Buyers were ideally positioned for another break out but they didn’t have enough steam to accomplish it. Sellers, long awaiting their opportunity, pushed the price down, breaking the weekly support. However, they couldn’t develop this into something more significant, as the bulls returned with a firm "no". The rest of the week continued in the same tug-of-war fashion.
The most confusing days were Thursday and Friday. Thursday started very bullish but ended with a dramatic bearish turn. Friday, expected to be bearish, unfolded under the bulls' control.
This was a story. Now, let’s now review all the signals more formally:
Bearish Signals
• Confirmed downtrend on the daily chart, indicated by a lower high and lower low.
• Weekly consolidation has begun.
Bullish Signals
• The week closed right at the previous week's low after price shaped hourly higher low
• Friday’s value zone is within the value zone of the previous four days.
The context remains very bullish – price is in a strong weekly uptrend, last month closed very strong. Overall, it is a very ambiguous case with neither side having a clear advantage. Buyers are exhausted, yet not willing to capitulate. Bears are attempting to play their game but lack sufficient strength.
The short-term outlook is neutral. From this position market can go in any direction. We need additional signs of one side gaining an upper hand. Until then, it is not advisable to place big bets on either side.
Wednesday is a very important day, with both the release of inflation data and the FOMC meeting
Disclaimer
I don't give trading or investing advice, just sharing my thoughts.
The most confusing days were Thursday and Friday. Thursday started very bullish but ended with a dramatic bearish turn. Friday, expected to be bearish, unfolded under the bulls' control.
This was a story. Now, let’s now review all the signals more formally:
Bearish Signals
• Confirmed downtrend on the daily chart, indicated by a lower high and lower low.
• Weekly consolidation has begun.
Bullish Signals
• The week closed right at the previous week's low after price shaped hourly higher low
• Friday’s value zone is within the value zone of the previous four days.
The context remains very bullish – price is in a strong weekly uptrend, last month closed very strong. Overall, it is a very ambiguous case with neither side having a clear advantage. Buyers are exhausted, yet not willing to capitulate. Bears are attempting to play their game but lack sufficient strength.
The short-term outlook is neutral. From this position market can go in any direction. We need additional signs of one side gaining an upper hand. Until then, it is not advisable to place big bets on either side.
Wednesday is a very important day, with both the release of inflation data and the FOMC meeting
Disclaimer
I don't give trading or investing advice, just sharing my thoughts.
Note
Monday saw market indecision, stemming from uncertainty due to mixed signals. Tomorrow I expect some extension of the trading range. But as long as we're within Thursday's candle, nothing changes.Note
Today we'll watch reaction to CPI data release and FOMC. Expect high volatility within 514.4-520.7 range. Please note that reactions to the first and to the second events might be opposite.Note
Today (Wednesday) has not added much clarity. The market opened with a bearish price gap but above last week's low (512.8). The rest of the day was spent rotating around the opening level. If we assess the achievements of each side, it still appears to be a tie: bears managed to break last week's low by a small margin, while bulls successfully held above it for most of the dayIf bulls manage to hold this level tomorrow price can go up to 523.
Note
Bulls have done great job today. They defended weekly low and arranged a convincing break out. It is a powerful statement but they have not yet confirmed control. Their next objective is to break 520.8 and build some value above it.
Disclaimer
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