SPX500 24/3/2025 Sideways to up pullback phase
Last Friday's candlestick closed as a bull bar near its high. The market opened lower but lacked follow-through selling and traded sideways to up for the rest of the day.
In our last report, we said that traders would see if the bears could create a strong bear bar, or if the market would open lower but lack follow-through selling, like Thursday.
The bulls want the market to form a 2 legged sideways to up pullback.
The pullback currently has more bull bars vs bear bars with no follow-through selling. The bulls are stronger.
The next targets for the bulls are the 20-day EMA, 200-day EMA or the January 13 low.
The market has formed 3 pushes up (including today's gap up) with the first two legs being the Mar 17 and Mar 19 high.
If there is a pullback, the bulls want at least a small sideways to up leg to retest the current leg high (Mar 24).
The bears see any pullback as minor. They expect at least a small second leg sideways to down to retest the Mar 13 low after the pullback phase.
The strong move down slightly favor the first pullback to be minor and not lead to a reversal up.
They were not able to create follow-through selling on Mar 18 and Mar 21.
They must create strong bear bars with follow-through selling to increase the odds of another leg down.
The prior climactic selloff and parabolic wedge increase the odds of a pullback which is underway.
Traders will see the strength of the pullback. If it is strong (consecutive bull bars closing near their highs), they may look for a retest of the 20-day and the breakout point - Jan 13 low.
If the pullback lacks follow-through buying (overlapping candlesticks, doji bars, bear bars, long tails above bars), the odds of another leg down AFTER the pullback phase increase.
For now, the buying pressure is stronger than the selling pressure (bear bars with no follow-through selling).
Odds slightly favor the market to still be in the sideways to up pullback phase.
