Today was the exception but for the rest of the week SPX moved down in the morning just to immediately find buyers in the afternoon. Market remains bullish also a bit overbought on short term.
On intermediate time frame the support is around 1,325 (SMA 120).
However, a potentially bearish pattern is forming as I write. It's a "rising wedge", a bearish pattern that forms when market is making higher highs and higher lows but the higher highs are not as vigorous as at the beginning of the rally. The market is then oscillating in a narrower range.
The problem with this pattern is that everything is in the "eye of the beholder". You can imagine ascending or descending wedges at any time, it all depends how are you drawing the edges. The same chart as above, but edges are drawn slightly different and the rising wedge is not as obvious anymore.
Anyway, you need to take into account that market rallied in an almost straight line from 1,205 until 1,357 so a correction is possible at any time. What interests me is what type of correction is going to be, a weak one (no lower that 1,300) or a more powerful one. A big correction is not going to work well for the long term bullish scenario since the market is going to move down before having a chance to make a higher high (above 1,370).
On intermediate time frame the support is around 1,325 (SMA 120).
However, a potentially bearish pattern is forming as I write. It's a "rising wedge", a bearish pattern that forms when market is making higher highs and higher lows but the higher highs are not as vigorous as at the beginning of the rally. The market is then oscillating in a narrower range.
The problem with this pattern is that everything is in the "eye of the beholder". You can imagine ascending or descending wedges at any time, it all depends how are you drawing the edges. The same chart as above, but edges are drawn slightly different and the rising wedge is not as obvious anymore.
Anyway, you need to take into account that market rallied in an almost straight line from 1,205 until 1,357 so a correction is possible at any time. What interests me is what type of correction is going to be, a weak one (no lower that 1,300) or a more powerful one. A big correction is not going to work well for the long term bullish scenario since the market is going to move down before having a chance to make a higher high (above 1,370).
No comments:
Post a Comment
Thank you for your feed-back