Hello Traders Investors And Community, welcome to this update-analysis about events since the last one, the current structural elements added to the environment, and what we can expect or nor expect from the SPX500 index. As mentioned in the previous forecast the index was and is trading in an important uptrend-channel which holding the whole bull-market construct to the upside since the corona-breakdown-lows seen this year, if you did not already see this analysis I highly recommend it to you when going on my account to have a full-depth-overview. As there increased the bearish pressure the last weeks due to new corona-fears and ongoing difficulties in certain fields which resulted in a swift down move with a gap developed and a piercing of the lower boundary the situation has altered to a shaky index right now, in this territory, we need to keep the possible scenarios coming upon us in mind to act accordingly when they happen and do not forget the still not recovered real economy.
As you can examine now when looking at my chart is that the index pierced the lower line of the channel to the downside which can certainly be a bull-trap before moving higher but the volatility with which this breakdown happened should not be ignored also the gap which provided during this speedy bearish breakdown was more bearish than bullish. This case shows one more time how events can affect the price in a fast and undetermined manner. For now, the index has found some support at the 30-EMA you can see marked in orange within my chart and now setting up to possibly fill the gap which confirmed downside when this gap-fill play out now we need to keep in mind that after such a mechanism the supply in the market can increase again as there are still sellers in the level who want to sell at certain prices.
Now when this overall scenario takes places it is from high importance for the index to hold the uptrend-channel to establish a solid base of support here because when this does not play out we will get bearish pressure to the downside for sure when confirming below. This will move the index to test remaining lower levels which will be the 100- and 500-EMA you can watch marked in green and black in my chart, in this case, the 500-EMA is extremely meaningful to establish support otherwise the index has a huge critical bearish zone below the EMA that is marked in red within my chart when the index confirms below that level it will increase bearishness to the downside and lower levels will be marked. On the other term when the index stays within the uptrend-channel it has to confirm above the established 3230 high to move higher and test the remaining all-time-high levels.
When comparing the technical situation with the fundamental real economic situation we can take note that the rally seen since the corona-lows this year was mostly driven by fresh money pumped into the market and was a recovery of the heavy breakdowns established this year which is a normal mechanism but the fact that the real economy does not grow together with the stock-market and is still damaged from the events happened makes the rally a more unhealthy environment because the real economy and stock-market should move together, therefore when considering the next weeks to come and a possible bullish continuation it is from high importance that the real economy grows together with the stock-market otherwise this bullish rally which will establish would be a speculative money-driven bull-market with no underlying fundamental base of growth, such a speculative rally can lead to more difficulties in the aftermath where bearish pressure can increase again, therefore, the rally should be seen with an critical eye to be on the track in case of possible upcoming volatility.
In that manner, thanks for watching, support for more market insights, and good day my friends.
Prospect is the ingredient of good fortune.
Information provided is only educational and should not be used to take action in the markets.
As you can examine now when looking at my chart is that the index pierced the lower line of the channel to the downside which can certainly be a bull-trap before moving higher but the volatility with which this breakdown happened should not be ignored also the gap which provided during this speedy bearish breakdown was more bearish than bullish. This case shows one more time how events can affect the price in a fast and undetermined manner. For now, the index has found some support at the 30-EMA you can see marked in orange within my chart and now setting up to possibly fill the gap which confirmed downside when this gap-fill play out now we need to keep in mind that after such a mechanism the supply in the market can increase again as there are still sellers in the level who want to sell at certain prices.
Now when this overall scenario takes places it is from high importance for the index to hold the uptrend-channel to establish a solid base of support here because when this does not play out we will get bearish pressure to the downside for sure when confirming below. This will move the index to test remaining lower levels which will be the 100- and 500-EMA you can watch marked in green and black in my chart, in this case, the 500-EMA is extremely meaningful to establish support otherwise the index has a huge critical bearish zone below the EMA that is marked in red within my chart when the index confirms below that level it will increase bearishness to the downside and lower levels will be marked. On the other term when the index stays within the uptrend-channel it has to confirm above the established 3230 high to move higher and test the remaining all-time-high levels.
When comparing the technical situation with the fundamental real economic situation we can take note that the rally seen since the corona-lows this year was mostly driven by fresh money pumped into the market and was a recovery of the heavy breakdowns established this year which is a normal mechanism but the fact that the real economy does not grow together with the stock-market and is still damaged from the events happened makes the rally a more unhealthy environment because the real economy and stock-market should move together, therefore when considering the next weeks to come and a possible bullish continuation it is from high importance that the real economy grows together with the stock-market otherwise this bullish rally which will establish would be a speculative money-driven bull-market with no underlying fundamental base of growth, such a speculative rally can lead to more difficulties in the aftermath where bearish pressure can increase again, therefore, the rally should be seen with an critical eye to be on the track in case of possible upcoming volatility.
In that manner, thanks for watching, support for more market insights, and good day my friends.
Prospect is the ingredient of good fortune.
Information provided is only educational and should not be used to take action in the markets.
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The S&P 500 since holding the major levels continued with a huge breakout into the all time high regions.