The S&P 500 continues to form an Ascending triangle, the 4th descending wave. Bearish sentiment is fueled by the opening with a gap down.
From October ’22 to May ’23, the index was in an uptrend ABCDE (each subsequent peak and decline were higher than the previous ones), but the May peak F could not surpass the previous peak D, determining the horizontal resistance level DF. From below, the support is determined by the points of decline C and E, which together form an ascending triangle CDEF.
Of course, an ascending triangle can also be a model of the base of the market (a reversal model), but the general rule recommends that it ALWAYS be considered as a bullish model.
Usually a triangle consists of 5 waves, i.e. it is logical to assume that we are in the 4th wave, a descending wave with the goal of CE.
Pay attention to the AC support line. On April 25, a FALSE BREAKDOWN took place - quotes broke through the support line, and on April 27, the market opened with a gap up, quotes returned above the AC line.
Today, on May 4, after 3 days of decline, the market opened with a gap down. This gap can be classified as a "breakaway" or "measuring" gap. Such gaps reflect a pause in the development of the current trend.
Thus, if today's gap is not closed and the quotes fall below 4050 points, this situation can be considered as confirmation of the penetration of the AU support line, confirming the downward wave in order to reach the AU support line.
From October ’22 to May ’23, the index was in an uptrend ABCDE (each subsequent peak and decline were higher than the previous ones), but the May peak F could not surpass the previous peak D, determining the horizontal resistance level DF. From below, the support is determined by the points of decline C and E, which together form an ascending triangle CDEF.
Of course, an ascending triangle can also be a model of the base of the market (a reversal model), but the general rule recommends that it ALWAYS be considered as a bullish model.
Usually a triangle consists of 5 waves, i.e. it is logical to assume that we are in the 4th wave, a descending wave with the goal of CE.
Pay attention to the AC support line. On April 25, a FALSE BREAKDOWN took place - quotes broke through the support line, and on April 27, the market opened with a gap up, quotes returned above the AC line.
Today, on May 4, after 3 days of decline, the market opened with a gap down. This gap can be classified as a "breakaway" or "measuring" gap. Such gaps reflect a pause in the development of the current trend.
Thus, if today's gap is not closed and the quotes fall below 4050 points, this situation can be considered as confirmation of the penetration of the AU support line, confirming the downward wave in order to reach the AU support line.