SPX500, Trading Between The Lines, Breakout Or Pull-Back?!

Hello, Traders Investors And Community, welcome to this analysis where we are looking at the SPX500 4-hour timeframe perspective, the recent events, the current formational structure, the upcoming price-actions, and how to handle the situation. As the stock market has recovered from the heavy corona-breakdowns seen this year many people looking at the major S&P 500 index and think what it will do next, the big question is now if the index can succeed in making a new high despite the still damaged real economy or if the bearishness sets in again supported by a second corona increase and the following measures taking place. In order to look at this problem in the right manner, we should keep in mind that the real economy and stock-market still showing big divergences to one another, while the real economy is still damaged and in a set-back due to coronas breakdowns the stock-market making gains mainly of the retailers rushing into the market while smart-money staying outside which can lead to a speculative market environment which need to be fixed in order to provide healthy growth in both factors.

The indecision and divergence can also be seen not only in fundamental aspects but also technical as you can watch examining my chart the index has formed a bigger bull-flag already which confirmed to the upside, filled the gap and noted above this level where it is now somewhat consolidating and forming another second possible bull-flag, which is smaller but it can show a more decisive breakout as the bull-flag is forming right slightly below the all-time-high-condition you can watch marked in red. This fact can either mean that the bull-flag will follow up with a strong upside breakout providing new all-time-highs or with a break below and a possible double top which can move the price way lower in the structure. As the index still has some solid support levels in the range forming with the S/R-level marked in black and the 55-EMA we can come to the conclusion that a bullish upside breakout is more likely and possible as the downside one because the index firstly has to take out the remaining supports where it will have a hard time to do so, in this case, the upside breakout after consolidation can be more expected.

When the index shows up with the more likely upside breakout this does not mean the index is completely bullish as this can still be a bull-trap and furthermore the index is trading in a weak uptrend with slowing down momentum which needs to increase when the breakout to the upside should be sustainable and last away, much more important than this is the fact that the real economy needs to grow together with the stock-market to make it a solid breakout and continuation potential with upcoming prosperity as it was seen in the past, we just have to imagine that the market needs to grow also without money printing into the market from central banks and on which point the price would be without these substitutions. Such mechanisms just ensure that a bigger crash postpones sooner or later as the situation gets intolerable we should see the current rally and possible breakout with continuation in a critical light to not get overwhelmed by circumstances if the environment reverses to the other side as this was factly true with many happening this year.

In this manner, thank you for watching the analysis, support for more market insight, a good weekend and all the best!
"There are many roads to prosperity, but one must be taken."

Information provided is only educational and should not be used to take action in the market.

Comment:

ANALYSIS UPDATE: The S&P 500 continued with bouncing within the whole range supports to emerge with a finalization of the bull flag formation.

The S&P 500 since completing the bull flag formation with a massive breakout increased major volatility to reach the final target projections.