SP500 Update

FX:SPX500   S&P 500 Index
Despite heavy selling last week and a very depressing mood in the market I maintain my stance that a strong bounce is ahead. I see an expanding triangle. Normally, you would spot an expanding triangle when it is formed. I pride my ability to see one step ahead which does not always work, of course. Especially when you hold a position. For example, my recent RTS analysis was clearly biased and it failed.

Here I am also biased as I hold longs and carry a loss. However, technically the picture looks supportive. The price is at strong support formed in turn by a smaller expanding triangle back in Jan 2021. The market mood seems to support my assumption. With increasing, volatility investors and traders are giving up in packs. During the bounce which should swing high, investors who sold at the bottom should start jumping in again out of FOMO. Just in time to get slaughtered on the way to the lows.

'These formations are relatively rare during normal market conditions over the long term since most markets tend to trend in one direction or another over time. For example, the S&P 500 has consistently moved higher over the long term; therefore, the formations are more common at times when market participants have begun to process a series of unsettling news topics. Topics such as geopolitical conflict or a change of direction in Fed policy, or especially a combination of the two, are likely to coincide with such formations.' - Investopedia

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