Week 39 Roundup — signs suggest S&P 500 stock market bottom?

27 בספט׳ 2020

Last week S&P 500 futures (ES) broke below the support level at 3300 and tested the immediate support area between 3200–3230. The results satisfied my expectation as stated in Week 38 market roundup, which covered the bearish scenario when S&P 500 failed to overcome 3425.

When we take a closer look at the S&P 500 chart, there are a couple of signs suggested a temporary bottom has been formed:

• Descending wedge pattern in the S&P 500 daily chart. The downward thrust was shortened suggested fading of the down momentum.

• Increasing effort to the downside in the US session on 23 Sep 2020 and during the non-regular trading hours session on 24-25 Sep 2020 did not produce a meaningful downward results, suggested supply absorption.

• Consistent demand came in on 24 & 25 Sep 2020 produced quality rally up, broke out the descending wedge and the first supply zone at 3270. This is the time where the effort to the upside is in sync with the results (a rally up)

• Last week’s price action of S&P 500 tested the support area at 3200–3230, where it is a logical place to see a bounce up.

These are the early signs to call for a bottom (at least for now). If S&P 500 can commit above the next resistance at 3320, it should continue its up momentum to test the crucial resistance at 3420 and 3450.

In Week 36 market roundup, I discussed potential distribution range for EURUSD. Last week, EURUSD finally broke below the immediate support level at 1.175 and close at 1.1628. Let’s see how the test of EURUSD behave at the resistance zone at 1.17–1.175. A failure at the resistance zone will see EURUSD to have further weakness down to 1.14-1.152.



In the crypto-currencies world, big cap like BTCUSDT is the leader while the small cap like the SHITPERP is the weakest. Yet, they are all in potential bullish rea-accumulation structure, which is another constructive sign for the equity market like S&P 500. Once the risk-on mode is on, all the related asset classes such as stock markets, crypto-currencies, AUDUSD, NZDUSD, CADUSD, etc…should perform.

Check out last week market analysis video series below if you haven’t or would like to reflect on how last week unfold together with your preparation and analysis:

Market analysis on 21 Sep 2020 - S&P 500 - failure to lift up with more weakness ahead

Market analysis on 22 Sep 2020 - S&P 500 - is this logical downside target for this correction?

Market analysis on 23 Sep 2020 - S&P 500 time to judge the bullish character (if it shows up)

Market analysis on 24 Sep 2020 - Is Falling wedge forming in S&P 500? Confirmation is needed

Market analysis on 25 Sep 2020 - S&P 500 how to trade false breakout with high winning rate

Stock Watchlist — Malaysia
VS (V.S INDUSTRY BHD) — VS continued to outperform the market and the peers. Currently at the resistance level at 2.1. The support is at 1.9. Continuation to the upside is expected.

JHM (JHM CONSOLIDATION BHD) — supply has been exhausted pending quality demand to push the price up. Support is at 1.5 while the resistance is at 1.76, 1.9.

REVENUE (REVENUE GROUP BERHAD) — Again, it is testing the support at 1.2. Supply has been exhausted. Quality demand is required to start a rally.

FRONTKN (FRONTKEN CORPORATION BHD) — trading range between 3.25–3.8. A break above 3.6 should see FRONTKN to test 3.8.

FFPGROUP (FOUNDPAC GROUP BERHAD) — It started a reaction to test the support at 0.95. A break above 1 should see FPGROUP to test the next resistance at 1.07.

MI (MI TECHNOVATION BERHAD) — It is still within a trading range between 3.7–4.4. Supply level is low. Quality demand is required to start a rally.

Stock Watchlist — US
Since the broad market like NASDAQ could be in a rally mode this coming week. It is crucial to monitor the rally of the technology stocks because since the correction at 3 Sep 2020, the rally from the technology stocks is of poor quality.

MSFT (MICROSOFT) — Support at 198 was once again tested and rebounded. Resistance is at 216.

FB (FACEBOOK) — Currently at a vulnerable position testing the support at 240-250. Supply level is generally high suggested selling pressure is still in progress.

IBB (Biotechnology ETF) — If it can stay within the zone 133–136, it should attempt to test the resistance at 146.

SE (SEA Limited) — Trading range between 130–164. It should attempt to test 164.

JD (JD.com) — Increase of supply did not take JD to a lower low suggested supply absorption. A rally is expected in the coming week to test 78 or higher.

NET (CLOUDFLARE) — A strong above 38 which saved NET from a distribution scenario. It should attempt to break above 42.

NASDAQ:LVGO (LIVONGO HEALTH) — Low level of supply with a trading range between 111–150.

PTON (PELOTON) — It is still within the trading range between 70–100. 88 is the immediate support level. It is likely to break above 100.

BABA (Alibaba Group Holdings) — hold up above support area at 260–267. A break above 280 should see BABA to test its resistance at 299.

BTG (B2GOLD CORP) — As mentioned in Week 38, it is crucial to watch how the supply spike on 18 Sep 2020 resolved. So far it only had a reaction tested the support at 6 again. Increased of supply suggested more time to be spent 6–7.5.

FSLY (FASTLY INC) — still within the trading range between 74–102 with decreasing supply. Expected to test the resistance at 102.

SQ (SQUARE INC) — It is likely to break above 158 and test 170. Support is at 135.

APPS (DIGITAL TURBINE INC) - After a sign of strength rally broke out the the trend line at 26, it is in a reaction mode. Support is at 28.

AVGO (BROADCOM INC) - Exhibits strong relative strength, with shallow reaction compared to the market. In addition, at least 1.5 years causes built during the accumulation period.



Study their charts and you should find them interesting in terms of price structure and volume signature.