Hello traders and investors! Ok, so SPX is struggling a lot lately, but the bulls managed to keep the prices up, above 61.8% fib retracement, but not by much – is still dangerously close. I find interesting that the last candles look so small, but that’s an illusion, caused by the huge volatility during the Covid-19 crash, with its big candles.
That’s why is always nice to look at the hourly chart:
Ok, there’s a gap and the price is trapped inside a congestion between the support zone and the pink line. The bulls are almost winning here, since they are breaking out this pink line and found support at the 21 ema (again). On the other hand, maybe is doing a Head and Shoulders here, with a very small shoulder, but I don’t know, I need more confirmation. If triggered, I’ll baptize this pattern as “Mutant H&S” – my idea, no stealing.
In any case, there’s no reason to buy SPX now, but I don’t see a reason to short either, only if you like fast trades, with a target at the black line, or the gap, but you guys already know this is not my style. And I prefer to buy VIX instead of short SPX, it fits better to my plans. So, no, I won’t short SPX, and I don’t think is interesting to do it right now.
And, since you’ve read so far, I think you found this analysis at least interesting, even if you disagree. In this case I invite to follow me to keep in touch, at some point we will agree at something and maybe we will learn with each other! Leave a comment, I always read and respond everyone.
I have my portfolio, and some of my trades I published here (three of them exactly), like the one I did on AAPL, XP INC, and LB (the last two I’m still in! Almost a month now!). Check the links below if you want to understand a little better about my trading style.
Remember to follow me, I’m a trader who uses the classic technical analysis (barely any indicator, just the candles and the volume). Like this idea if it helped.
Thank you very much.
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The risk to reward is definitely skewed to the downside at this stage. Does that mean that the market will roll over? Absolutely not, but I like a short trade targeting the 2800 level and a stop above the recent swing high.
Nathan_Black
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@dan88gold, Hey Dan! Yeah, that's very reasonable, with a clear stop and target. I invite you to stick around, I just did another analysis today, updating some points.
I wish you the best.
DaddySawbucks
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Good points, well taken, ty for post. Pure gamble atm IMO. Could swing either way or both ways now;
FYI, closed out all bear spreads 5/22 as it seems the first tar gap closed in AH trade, selling peaked ~4am EST.
Risk-offed; looks like bulls not done yet IMO, I expect to see 3k next week before we get a real break. Good weekend!
Nathan_Black
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@DaddySawbucks, Hello DaddySawbucks! Thank you for the support! Agree, now isn't time to do anything if you're out. The best thing to do is wait for the next opportunity.
Today I'll do another analysis. Let's see how today's candle will close.
I wish you well, and a good weekend to you too!
farmerisland
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@Nathan_Black, what levels/price action would we need to see today or in the closing candle to feel more strongly about some upside potential early next week again? So far we haven't traded above yesterday's close... Am I correct in viewing that fairly bearish?..
Nathan_Black
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@farmerisland, I think you are right, but that's because the struggle is very intense now. But there's nothing to worry in my view. If this "mutant H&S" will be frustrated in the 60min chart, then it'll be a very good sign that could lead the price to new levels.
I'll update you when the market close today, as always. But until now, I see no reason to panic.
Trade well!
DMark1
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Good analysis again, Nathan. I still am leaning bearish...huge gap to fill down to 2864 support if we cross below the 200 day MA, market volume is drying up as the market has been drifting higher, and of course we are seeing Warren Buffet selling off 19 positions in the 1st quarter and raising truckloads of cash for...SOMETHING. He's usually not wrong, and he loves to buy when there is blood in the streets. I believe Berkshire is almost 50% cash at the moment. I get the feeling that the smart money is selling into this rally.
Nathan_Black
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@DMark1, Hey DMark, that's a good point! Yeah, I have my eyes on this gap too, let's see how SPX will close today. If Mr. Buffett is selling, then there's something for sure!
Stay safe, and I wish you well.
Elias369
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Who is bullish? The Algos and retail accounts? wait until institutions start taking profits and this will come down to 2860
Nathan_Black
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@Elias369, Hello Elias, thanks for commenting! Well, I've been a bull since April, not long on SPX, but I'm long in some stocks, as you can see on the links that I left below this analysis. And a drop all the way back to 2860 wouldn't concern me at all, I would still be profiting a lot. When the time comes, I will stick with the bears, but until then, I'm just following the trend.
I respect the bears here, and I get their point, and this is just my opinion.