The index is still trapped inside the congestion we mentioned yesterday, between the green line at 3861 and the black line at 3827, and as long as we don’t see a real breakout from any of these points, the index will continue moving sideways. If you missed my previous analysis, just check the link below.
On the bright side, we are trading above the 21 , which is still pointing up, so the bias is slightly more than bearish. If the index defeats the green line again, probably it’ll resume the trend.
Let’s see if the now:
Yesterday’s reaction was very impressive, indeed. We have a powerful Hammer candlestick pattern, that is almost a Dragonfly , which was triggered today. The volume was quite high as well, so the SPX is quite strong at the moment.
The trend is clearly , and we have no clear reversal or pullback signs around. As long the index keeps trading this way, the trend will persist, according to the 6th tenet of the Dow Theory. But if the index loses the 3827, we may see some pullback ahead, and the 21 would be the next stop.
For now, let’s see if the index will break the 3861, as this is the most challenging point for the index right now, and if it defeats this point, it’ll fly to new levels.
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