Hello traders and investors! Let’s see how the SPX is doing today!
The index is in a very strong bull trend, and there are no top, pullback or reversal signs ahead of us! We have a new record high today, which is incredible, but the only thing that bugs me is the volume. Despite the bullish run we had last week, the volume didn’t follow this movement, and in fact, it had decreased.
Of course, this alone is not a reason to believe we’ll have a pullback next, as the price is not confirming anything yet, but is something to be aware of. Now, what kind of sign could work as a pullback sign? Let’s see the hourly chart for that:
The index is supposed to do pullbacks to the 21 ema, and the trend will remain bullish, but if it loses the 21 ema, then we may consider a sharper pullback ahead, and if it starts trading below the black line at 3870, then the pullback will occur in the daily chart as well.
Keep in mind that if these signs trigger a pullback, the index could drop to its purple trendline seen in the daily chart again (meaning, something between 2 – 2.5%) and this is fine. This would be just a pullback and we still would be in a bull trend.
Pullback signs are different than reversal signs, which are slightly more complex to identify. But so far, we are good. Follow me to keep updated about my thoughts on the SPX and other stocks, and if you liked this idea, please, support it!
@ellisd13, Hey Ellis! You are welcome, my friend! Yes, it is! Hope you had a nice weekend too!
My batteries are charged, ready for another week. :)
Trade well.
Nick6159
⋅
I’m looking at this after the week is over.
Prior to the presidential election between September and November we see some pull back and indecision. My guess is this is money in sectors changing hands. Where as the Trump administration was all about saving coal and oil for his rich buddies ( the very swamp he promised to drain) the rest of the world was moving to EV and lithium in which we find ourselves behind China. As it started to become clear that Biden could win, which would mean investors changing their investments according to what ever sector the new administration might be hyping up, the market stated to move. A buy low sell high principal. To buy low you have to buy early. Hence, you sectors beginning to change and as we got closer to the election as polls favored Biden you see the market getting bullish. Now that everything is in place my “guess” is that we will see strong bullish momentum at least until next earnings dates, with the occasional consolidation like we saw this past week. The week ended with a Doji / hammers style candle creating a new support. This new support was touched by a second candle similar to the first on lighter volume and Friday finished off with an increase in volume and a break above resistance.
I’m thinking on Thursday and Friday there was probably a lot of good buying opportunities and the week coming should pay off as long as nothing crazy happens. I plan on waking up early Tomorrow, Monday to see if I can catch some good deals. Right now I got EVOK. At 3.26 which looks like it made a first move in an uptrend. Analysis say sell but institutions know that when they report earnings in March it very well could be the first time the company is profitable as it got FDA approval during Q3 of the previous year. You can see a huge volume spike at 3.31 and then a pull back to what Richard Wychoff would term as preliminary support. Also looking at AMCR, CCRC, and AAPL.
Please anyone who reads this take my words with a grain of salt. The stock market is a battle field and I recommend you do your own due diligence and never risk more than 1% of your capital on a single trade if you’re new.
Parul27
⋅
Thank you for your analysis. Market correction will happen for sure as we have seen these kind of runs before too. Keeping eye on my stop losses.
Nathan_Black
⋅
@Parul27, You are welcome, Parul. Let's proceed carefully, because the market is not easy for anyone here.