The_Unwind

Bullish Potential Reversal ? Very Important Monthly Cl. 10/31/18

SPCFD:SPX   S&P 500 Index
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I have been Bearish on the S+P 500,
since the all time high of 2940 on 9/21/18,
capturing 337 points of Decline to the 2603.54 Low on 10/29/18.
I have both forecast,and written about the decline,
in numerous articles here on tradingview.com

As the hours pass towards month end chart close today,
I am seeing signs the "shake out" low at 2603.54 on 10/29/18 appears
to have SATISFIED a SUCCESSFUL MONTHLY RETEST
of very important MONTHLY TREND LINE CHART SUPPORT, unless reversed on 10/31

Futher bullish evidence shows the 2660 price area in the S+P has found double bottom support, which is also bullish .

S+ P 500 Dec 18' Futures have also broken out of a declining trend line
on the 4 Hour OPEN Chart I keep on 10/30/18, and are adding to the breakout on 10/31/18

The rally on 10/30/18 and the makings of a continued rally on 10/31/18,
show that it could soon meet the " 45 Degree Resistance Angle" at S+P 2710

Important Bullish Divergences,have been accompanying the advance off the 2603 10/29/18 Low.

As traders and investors, we must always be aware of a potential important change in TREND direction.
10/31/18 Monthly Close today, is overwhelmingly important monthly chart closing evidence.

I shall have an additional update,here at tradingview.com, at the close of business today.

THE_UNWIND
10/31/18 700 am
NEW YORK

Oct 31
Comment: S+P 500 Close 10/31/18
2711.74

Comment:
Although the S+P 500 managed to close ABOVE the 45 Degree Resistance Angle,
it did so fractionally... above 2710 at 2711.74

OF NOTE: The almost the entire day... 5 RSI Minute Divergence,..
from 945 am this morning, when RSI Reached a High of 83.13
with the S+P 500 at 2715

The rally from 2715 to the Daily High of 2736.69 was COMPLETELY UNCONFIRMED,
meaning that sell volume was in control, as price rose to today's high.
Put another way, sellers were unloading their shares into today's rally high.
.
I see the evidence today
as a sharp price rally, into a wall of resistance sellers from above,
which to me was clearly BEARISH.

My traders instincts tell me today's rally
could be another potential bull trap in the making.
But It will take further price action in early November
to quantify whether today's end of the month rally,... will ultimately hold.

THE_UNWIND
10/31/18 443 PM
NEW YORK
Nov 01
Comment: S+P 500 had a breakout move past 2710 resistance to Close at 2740.37 today.
HOWEVER, APPLE which is big part of the DOW and Nasdaq 100,
dropped sharply in after-hours trading on disappointing I- PHONE Sales.
APPL last quoted at 207, down 7 %

Thus I will be watching closely tomorrow, to quantify this breakout
to see if the S+P 500 manages to close the week,
above 2710 RESISTANCE. 45 Degree Angle on the Weekly Close
which carries significantly more weight than a Daily Close.

If the S+P Closes 11/2/18 back Below 2710 RESISTANCE on the week,
then today's rally could have been a Chart Breakout "BULL TRAP",
...about as Bearish as you can get, especially at this stage in the market.

THE_UNWIND
11/1/18 600 PM
NEW YORK
Nov 02
Comment: As I suggested in my last update on 11/1/18,
S+P 500 after breaking out to the upside this morning,
to catch additional bulls, in the BULL TRAP,
looks to want to retest a weekly CLOSE ABOVE 2710 today !

WATCH 2710 on the CLOSE.

A close below it would extremely BEARISH,
setting the" bull trap".. up to S+P 2756
and would set up an additional downside move, next week.

I will post an updated article on the S+P 500
here on tradingview.com this weekend.

THE_UNWIND
11/2/18 1215 PM
NEW YORK

Comments

This is going to be a choppy and difficult time to trade until trend gets re-established.... BUT one thing I come back to is remember AMZN will go into a Phase 6, and the Nasdaq is bouncing off of its Phase 4 line.. this buys a good amount of time for a substantial uptrend reversal. This could be the most dangerous of all bull traps over the next 2-3 months. A scenario that keeps playing through my head is AMZN will go into a Phase 6, probably soon, it along with the Nasdaq will resume a moderate uptrend for at least the next month possibly 2-3... it will have serious pull on the S&P 500 and help it also move up or consolidate with bullish bias. Until the Phase 4 in the Nasdaq is broken the S&P can be kept afloat or even strong. When AMZN goes into a phase 7, with NFLX already in a Phase 7, the dominoes will start to fall and eventually roll over. For now we just have to be patient and follow the market and use a bit of good old fashion tape reading skills to try and get an edge along with the technicals you present here on tradingview. One last thing remember that in 2000 when the Nasdaq crashed it still took the S&P and the Dow 6-8 months before they really caught up to the Nasdaq and entered bear markets. The other thing here is that the Russel 2000 might be going through its Phase 5 into a 6 as well. Putting together all of these themes leads me to think bounce/possibly significant/ultimate bear trap builds/markets breakdown but perception will be just like in the past, buy the dip no matter how serious the correction and consequently many people will get hurt. BOL on your trades and thank you for the great analysis!
Reply
Possible bull trap here, looks like expanded flat forming with C wave in play.
Reply
The_Unwind Geofftv1
@Geofftv1,

Geoff,
Interesting read, and always a possibility.
Watching for a close above or below, 2710 on 10/31
Thank you for your input.
Reply
Excellent info. Thank you so much!
Reply
@Hoyto,

Thank you, for your kind feedback.
Best of luck.
Reply
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