S&P500 Has it bottomed beyond any doubt?

Two weeks ago the S&P500 index (SPX) closed above its 1W MA50 (blue trend-line) for the first time since the week of April 04 2022. Last week it tested the 1W MA50 as a Support, successfully held it and rebounded. If it wasn't for the rejection just below the 1W MA100, we would talk about the perfect break-out.

Still however this is a nearly perfect recovery:

a) The dominant pattern was an Inverse Head and Shoulders (IH&S), which practically formed the bottom of the Bear Cycle, rebounding on the 1W MA200 (orange trend-line).
b) The 1W RSI started rising on Higher Lows, while the price was on Lower Lows, waving a huge bullish divergence.

Interestingly, we've seen the very same IH&S pattern and RSI Bullish Divergence during both of the last major Bear Cycles, the 2008/09 Housing Crisis and 2001/02 Dotcom crash. Common feature of those two is that after the index closed above the 1W MA50, it formed a Channel Up (green pattern) that led it straight to the 1W MA200. This time the 1W MA200 is a Support, but there is the Resistance of previous Lower High to consider. And that is at 4640. Valid target in our opinion by the end of Q3 if this Channel Up is materialized.


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