Savage bull likely pulling back next week
Impressive and incredible bull-run from the lows but it's time to be cautious & patient at these levels.
- Hovering near the top of a 6 month resistance TL.
- The run seems to be overextended with RSI's overbought at nearly all longer timeframes.
- Trading way over the 10 & 20 day EMA's, unlikely to sustain at this pace for much longer.
- The SPX gap between 4020 and 4047 will certainly be filled; NDX gap-ups have fueled this rally.
- Decreasing volume & SMA approaching spike zone.
- 6-hour volume weighted MACD cross-over signaling potential reversal soon. The most recent 5 cross-overs always followed with a pullback as highlighted.
I'm not bearish, there is no reason to be bearish as this market can still grind higher but it's foolish to also believe the market won't take a needed breather in the process. ES levels from 3970-4010 are more likely to be tested sooner than later.
Note: I am not neglecting the possibility of a rally running into big tech earnings towards the end of the month; market never fails to surprise.
Trade safe!
- Hovering near the top of a 6 month resistance TL.
- The run seems to be overextended with RSI's overbought at nearly all longer timeframes.
- Trading way over the 10 & 20 day EMA's, unlikely to sustain at this pace for much longer.
- The SPX gap between 4020 and 4047 will certainly be filled; NDX gap-ups have fueled this rally.
- Decreasing volume & SMA approaching spike zone.
- 6-hour volume weighted MACD cross-over signaling potential reversal soon. The most recent 5 cross-overs always followed with a pullback as highlighted.
I'm not bearish, there is no reason to be bearish as this market can still grind higher but it's foolish to also believe the market won't take a needed breather in the process. ES levels from 3970-4010 are more likely to be tested sooner than later.
Note: I am not neglecting the possibility of a rally running into big tech earnings towards the end of the month; market never fails to surprise.
Trade safe!
Comment:
Idea did not materialize and there are no signs of reversal just yet. We're still ultra-bull so take advantage of it while it lasts but my personal take is that the market is setting itself up for a vicious pullback. Economic data & upcoming earnings are adding further fuel to fire.