Nathan_Black

SPX: How to use the Principle of Polarity! + Trend analysis.

SP:SPX   S&P 500 Index
Hello traders and investors! Let’s see how the SPX is doing today!

In my last video, we talked about one of the most important principles that govern technical analysis , the Principle of Polarity. It is a must-know technique for any trader that states once a resistance (support) is defeated, it’ll become a support (resistance) in the future, next time the price retests it.

The 4,393 is working as a relevant support area , because it was a previous resistance (and previous ATH at the same time). It is also interesting to notice that when the index crashed on July 19, we sought the support area at 4,255, which was the previous resistance level too. Even during stressful times, it is possible to find some sense using price action.

For now, the index is behaving as we expected, the 21 ema is going up nicely, and it is another interesting support level for us. As we discussed, there’s a possibility of a Flag pattern too, but I’m not counting too much on that.


Now, some people might say, and I won’t disagree, that we have a possible Head & Shoulders chart pattern in the 1h chart. The problem is that today’s movement is ruining the pattern, and we are above the 21 ema again.

However, I agree that if we lose the 4,393 in the daily chart , along with the 4,369 in the daily chart , we might see a sharper pullback, but not a reversal. Let’s use Fibonacci in the daily chart:


Technically speaking, we could seek even the 61.8% retracement, and the mid-term bias would still be bullish . The index would require a true bearish structure to reverse for real, and as long as we don't see one, the trend will remain bullish . Meanwhile, I’ll update you with my weekly videos and analysis.

Remember to follow me to keep in touch with my daily studies, and if you liked this idea, please, support it!

Thank you very much!
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🔴 📺 Will the market finally crash this time? Here's my honest answer with some very nice trading ideas: https://youtu.be/psUkUkHROus

Comments

Nathan, really appreciate the intermediate term analysis for more long term, thanks.
+1 Reply
Nathan_Black tnmccammon
@tnmccammon, And I appreciate your support, my friend! Thank you very much!

All the best to you.
Reply
Brilliant analysis as usual @Nathan_Black
Just begun watching your weekly market analysis on YouTube, which is really helpful.
Thank you so much for making all this available. It's been a big help to me on so many occasions to avoid going too defensive with my portfolio simply because the market had come such a long way. Of course we have to keep watching what the price action is telling us but it's made a huge positive difference to my portfolio returns to read your work.
Cheers
+1 Reply
Nathan_Black PeanutsMolloy
@PeanutsMolloy, Awesome! I' glad to help, Peanuts! And I really appreciate your support!

All the best to you, my friend!
+1 Reply
i have a general question. if we see bearish structure in 1h chart, but don't see bearish structure in daily chart (for example, ETHUSD right now), what should we do?
+1 Reply
Nathan_Black andrew900713
@andrew900713, it depends on your strategy. If you focus on the mid-term, then it is just a pullback, and might be just an opportunity to buy more. Most of the harmless pullbacks we see in the daily charts are made of bearish structures in smaller time-frames. We can see this a lot, especially on SPX, and it is also called "bear traps", as many people think a new crash is happening before it resumes the bull trend in the daily chart.

I hope it helps. Have a good day!
+4 Reply
andrew900713 Nathan_Black
@Nathan_Black, thank you very much!
Reply
Thank you for info and analysis.
Reply
Nathan_Black Thinus5422
@Thinus5422, Thanks for your support, Thinus!

Cheers!
Reply