Hey everyone, I wanted to give you all a technical update on the S&P 500 (SPX) as it's been moving sideways for a few weeks now, and it seems like it's not done yet. With a lot of options expiring today, we might see some volatility soon, but let's consider what the majority is currently thinking.
According to the American Association of Individual Investors (AAII), we have 27% bullish sentiment, 37% neutral, and the remaining percentage is bearish. This is a change from just a couple of weeks ago, when 33% were bullish. The spread shows some greed, but not too much. We're right in the middle, which could mean a bit more sideways movement or even a slight upside in the short term.
Now, let me give you a quick educational insight into a technical pattern called a leading diagonal. A leading diagonal is a type of impulsive wave structure that occurs in the first wave of a motive sequence. It consists of five subwaves, with the first, third, and fifth waves typically subdividing into three smaller waves.
Looking at the SPX chart, you'll see a classic leading diagonal with all the subwaves fitting within it. If the SPX remains below 4170, the bearish count will be valid. I believe it's highly possible we revisit the 4120-4124 range before bouncing back up to around 4150 early next week. If the corrective structure I've projected plays out, we should see a more aggressive move to the downside by mid-week next week.
Of course, many things still need to happen, but keep a close eye on the trendlines I've placed on the chart. Pay special attention to the leading diagonal in green, the support level in yellow, old support in red, and key resistance in orange. Don't forget the horizontal support and resistance that has been critical for more than just a few weeks, especially the 4130-4140 zone. We've been battling in this area for quite some time.
Trade carefully, friends, and remember to always do your own research and manage your risk. I'll keep you all updated as things progress.
According to the American Association of Individual Investors (AAII), we have 27% bullish sentiment, 37% neutral, and the remaining percentage is bearish. This is a change from just a couple of weeks ago, when 33% were bullish. The spread shows some greed, but not too much. We're right in the middle, which could mean a bit more sideways movement or even a slight upside in the short term.
Now, let me give you a quick educational insight into a technical pattern called a leading diagonal. A leading diagonal is a type of impulsive wave structure that occurs in the first wave of a motive sequence. It consists of five subwaves, with the first, third, and fifth waves typically subdividing into three smaller waves.
Looking at the SPX chart, you'll see a classic leading diagonal with all the subwaves fitting within it. If the SPX remains below 4170, the bearish count will be valid. I believe it's highly possible we revisit the 4120-4124 range before bouncing back up to around 4150 early next week. If the corrective structure I've projected plays out, we should see a more aggressive move to the downside by mid-week next week.
Of course, many things still need to happen, but keep a close eye on the trendlines I've placed on the chart. Pay special attention to the leading diagonal in green, the support level in yellow, old support in red, and key resistance in orange. Don't forget the horizontal support and resistance that has been critical for more than just a few weeks, especially the 4130-4140 zone. We've been battling in this area for quite some time.
Trade carefully, friends, and remember to always do your own research and manage your risk. I'll keep you all updated as things progress.
Trade active:
Everything is still moving according to plan. Give it another day or two at the most before things resolve. SPX has been a bit annoying the last month as it's in the same range as it has been for what feels like a year. We should get an increase of volatility soon, though. Be careful with options as theta decay is killing people waiting for a big move and when things do move, you don't want to be positioned incorrectly.
