SPX500 - Bulls Need Strong Entry Bar - 6 Mar 2025
The report below uses the Spy chart which is the Normal Trading House.
• The market traded lower earlier to retest the March 4 low but formed a higher low. The market then reversed higher into the close, closing the daily candlestick as a bull inside bar closing in its upper half.
• The bulls see the market trading in a broad bull channel and want the move to continue for months. They want an endless pullback bull trend.
• They want a retest of the all-time high (Dec 6) followed by a breakout and trend resumption. They see the current move (Mar 4) as a bear leg within the trading range.
• They want a reversal from a double bottom bull flag (Jan 13 and Mar 4) and a wedge (Feb 25, Feb 28, and Mar 4).
• They hope the bottom of the 22-week trading range will act as support. They want a failed breakout below the January 13 low. So far, the breakout below the trading range low has limited follow-through selling.
• At the least, they want a retest of the middle of the trading range (around the 20-day EMA). They must create a strong entry bar today (March 6) to increase the odds of the bull leg beginning.
• If the market trades lower, they want the November 4 or October 3 low to act as support.
• The bears got a reversal from a higher high major trend reversal, a wedge top (Dec 6, Jan 24, and Feb 19), and a smaller double top (Jan 24 and Feb 19).
• They see the market as being in a 22-week trading range.
• They got a bear leg to retest the January 13 low and hope to get a breakout followed by a measured move based on the height of the 22-week trading range.
• So far, the breakout below the January 13 low has limited follow-through selling.
• If the market trades higher, they want the bear trend line or the 20-day EMA to act as resistance.
• They want at least a small second leg sideways to down to retest the March 4 low after a pullback (bounce).
• So far, the market is trading in a 22-week trading range.
• The SPX broke below the January 13 low (Mar 4) but the follow-through selling has been limited.
• The move down is strong enough for traders to expect at least a small second leg sideways to down after a pullback (bounce).
• For now, traders will see if the bulls can create a strong bull entry bar today.
• Or will the market trade slightly higher, but stall and close with a long tail or a bear body instead?
• The bulls need to create consecutive bull bars closing near their highs to show that they are back in control.
• The bears must create a strong breakout below the January 13 low with follow-through selling to convince traders a breakout could be underway.
• Traders may BLSH (Buy Low, Sell High) within the trading range until there is a breakout from either direction with follow-through buying/selling.