S&P recovers; bulls maintain long-term control
The last week of August was sluggish, despite several exciting events. First, NVDA’s earnings, although very strong, failed to boost the market beyond its daily trading range. The GDP and inflation data (positive) released later also didn’t provide sufficient momentum, and the market continued to bracket. The week closed at the high, but buyers didn’t manage to break out of the trading range and confirm control of the daily timeframe. We can conclude that the market has reached a temporary balance—both bulls and bears seem content with the current price and lack the conviction to initiate strong moves.
Zooming out to the monthly view, August closed green, near the historical high. The long lower wick signifies a bullish rally that brought the price up from the low, indicating the strength and conviction of the bulls. Although the bulls didn’t manage to achieve a new high, they still maintain long-term control.
Overall, the market is still in a monthly and weekly uptrend. Even if sellers manage to set a weekly lower high in September, it is unlikely to mark the start of a trend reversal. Buyers have created enough space for potential weekly consolidation that will not threaten their long-term control.
Important levels:
Zooming out to the monthly view, August closed green, near the historical high. The long lower wick signifies a bullish rally that brought the price up from the low, indicating the strength and conviction of the bulls. Although the bulls didn’t manage to achieve a new high, they still maintain long-term control.
Overall, the market is still in a monthly and weekly uptrend. Even if sellers manage to set a weekly lower high in September, it is unlikely to mark the start of a trend reversal. Buyers have created enough space for potential weekly consolidation that will not threaten their long-term control.
Important levels:
- Last major weekly trend high (565). If buyers manage to move above and hold they will confirm continuation of monthly uptrend.
- Last major weekly trend low (510). Buyers must protect this level if they want to keep long term control
- Short Term Trading range (555-564). Breaking out from the range in either direction will mark gaining of a short-term control.
Note
Range has been breached to the downside. There must be a strong follow through. if it doesn't happen and price returns into the range, expect a rally
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