SPX Digests the Highs

Nov 8

SPX spent the last week and a half digesting the new all-time high, pulling back deeper than I expected but holding the weekly trend. Price found support at 6,632 and closed back inside the yellow zone where we’ve seen noise before.

This week I’m watching for one of these scenarios: a sideways reset that drifts higher, a cleaner rebound through the moving averages, or a retest of support with a possible shakeout toward 6,555 (weekly chart shows support for this so it could also be a positive week followed by a decline).

The broader uptrend structure is still intact, and I still have a bullish bias, but I will be more attentive of a retest and roll over. We declined about 4% from the ATH but have easily declined around 8% -10% on earlier digestions this year.

Nov 9

Note

I'd like to make a correction: I don't know what I was measuring yesterday but the pullbacks we have seen along the uptrend (after the February decline) have only been around 3%-3.3%.

If that is the case, this 4% decline was the steepest pullback so far. If we look at what supports the upside now, I'd say:

W did hold the 10EMA
D SRSI has reset below 20
Digestion was adequate if comparing to previous pullbacks
Overall uptrend is still intact

The bearish/neutral support would be:
W SRSI is not reset, but that can also mean we do a bit of digesting sideways or in an upward drift. I don't put all the weight on one indicator, but I do remain aware of what each indicator is saying. The SRSI could easily turn up from this midway point. For oscillators: where they are at on their scales is not as important as when they start to turn to go in the other direction. When a SRSI is below 20, that clues us in that we will turn up soon (soon being undefined) and when we are above 80, that suggests we will be pulling back soon (again undefined and how far we pullback is based on a lot of other factors).

Thank you for all the comments to push me to articulate better and clarify further. Appreciate the engagement/discussion!