a daily price action after hour update - sp500

CME_MINI:MES1!   Micro E-mini S&P 500 Index Futures
Good evening and i hope you are well.

Today we witnessed a perfect bull trap above the recent new all time highs for US markets. Here is the most important quote from my weekly outlook i posted yesterday:

We already ranged at the highs for some time now and for most indexes it’s just a higher high and now i expect a major trend reversal. Hence the title, the bear awaking.

The higher highs maybe higher than i anticipated, yet the thesis was and is perfect and if bears can get follow through the next days, the highs are in for maybe a decade.

Quote from yesterday’s weekly outlook:

We could easily see a 200 point drop to the daily 20ema because no one wants to be left holding the bag buying at the ath and the market is overdue for some sort of minor correction. Bears wont get a bigger one until we have traded more sideways at the highs. Biggest question now is the monthly close and if bears manage to close it below 5000, i think its very likely that the highs are in for the year. Targets for the bears next week are 5000, 4950, 4900.

Market rallied hard and fell harder afterwards to close below Friday’s close. Perfect bull trap.

bull case: Bulls made another ath and have many support lines to buy from. As long as they keep it above 5025, bulls are still in control. They want to trade back up from the lower bull channel trend lines for at least a retest of 5050 or 5066.

bear case: Bears stepped aside for the opening rally to a new ath, just to aggressively sell the double top bar 13 at 5065. The sell off was strong enough to expect a second leg and a measured move would bring us right back to 5000. They trapped many late bulls and many more will have stops around 5020/5000. So if bears can generate good follow through, we might see more big profit taking. Next target below 5000 is the daily 20ema around 4940.

short term: sideways to down

medium-long term: medium-long term: down - what would change that? two consecutive daily closes above 5100

trade of the day: long from the open because it was right at the 1h 20ema and bar 9 was a good 15m bull signal bar and short bar 13 (was a perfect double top on the 5m chart)


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