Thursday wasn't a good day for bulls who have been enjoying a rocket ride for almost 2 weeks. Bears finally put in a big red to stop the stampede. So, what jumps out off the bat?
1. Price is outside the smaller downtrend channel and inside the bigger uptrend channel.
2. Price nearly made a 100% retrace of the previous break down. NDX made a new higher high. SPX has created somewhat of negative divergence in RSI, but NDX does not have that.
3. SPX did not quite fill the gap at 4400 and left a lot of gaps below.
What to look for now?
For Bull
1. Daily RSI needs to hold above 45.
2. Price should hold .5 retrace or even higher.
3. Should form some sort of inverse head and shoulder pattern.
4. At or near 4500 by end of November and not getting over 50% retrace on any legs.
For Bear
1. To get the bear narrative back, daily RSI should break below 45.
2. The entire rally should evaporate by next week or so.
3. The bounces should be short lived.
4. Should be at or below 4000 before November end and then a Santa rally.
1. Price is outside the smaller downtrend channel and inside the bigger uptrend channel.
2. Price nearly made a 100% retrace of the previous break down. NDX made a new higher high. SPX has created somewhat of negative divergence in RSI, but NDX does not have that.
3. SPX did not quite fill the gap at 4400 and left a lot of gaps below.
What to look for now?
For Bull
1. Daily RSI needs to hold above 45.
2. Price should hold .5 retrace or even higher.
3. Should form some sort of inverse head and shoulder pattern.
4. At or near 4500 by end of November and not getting over 50% retrace on any legs.
For Bear
1. To get the bear narrative back, daily RSI should break below 45.
2. The entire rally should evaporate by next week or so.
3. The bounces should be short lived.
4. Should be at or below 4000 before November end and then a Santa rally.
