S&P weekly consolidation ongoing; uptrend still intactLast week began with a bull rally that was very short-lived. Sellers stepped in, driving the price down through the last consolidation (and potential support) zone. By the end of the week, the market experienced a 180-degree shift in sentiment, with Friday closing with a bullish inside candle.
Currently, we have the following disposition:
1. The price is in an uptrend on the weekly chart, indicating that long-term buyers still maintain control.
2. The daily chart shows a downtrend, but so far, sellers have only managed to retrace 50% of the previous green wave.
3. There is an unfilled gap from Wednesday, the 24th. If bulls can fill this gap this week, it will demonstrate their strength.
From a fundamental perspective, there was no significant negative news. On the contrary, the inflation data was quite positive, and earnings were mostly decent, except for TSLA. This suggests that the current downtrend is just a controlled weekly consolidation. Therefore, we should look for a weekly higher low to enter LONG positions to capitalize on the continuation of the weekly uptrend.
A lot will depend on the Big Tech earnings reports coming out this week, but so far, there is no reason to expect negative surprises.
Disclaimer
I don't give trading or investing advice, just sharing my thoughts.
