S&P Return to Normal… Or Return to 2013 - 2016?
Looking for potential support and resistance levels on the S&P (SPX500USD).
The first idea is to look for how a bottom might look if formed here.
Two likely situations are:
1. A higher low formed around here which creates a sort of “V” shaped bottom.
2. A “W” shaped bottom formed with a retest of the previous low.
A failure to put at least a local bottom in here means looking for support at 2016 or even 2013 levels before another attempt at a rally.
Meanwhile, a successful rally here would call into question if this was just a “return to normal rally” (essentially a bull trap) or if this was truly setting the stage for new highs?
If we go up, key resistance levels include the bearish order blocks formed by previous ranges at Resistance 1 and Resistance 2 as marked on the chart. Here a rejection at Resistance 1, and thus a failure to make a higher high, would hammer in the idea of a "return to normal rally," which would be common for the start of a bear market.
Right now our Fractal Trend (red background color) and Directional Bias (yellow line) have a short bias and form this perspective we would expect more downside. However, our Scalper has a short term long bias. Thus, we might see this as a potential inflection point and are therefore looking for action to trade the trend wherever it goes.
The first idea is to look for how a bottom might look if formed here.
Two likely situations are:
1. A higher low formed around here which creates a sort of “V” shaped bottom.
2. A “W” shaped bottom formed with a retest of the previous low.
A failure to put at least a local bottom in here means looking for support at 2016 or even 2013 levels before another attempt at a rally.
Meanwhile, a successful rally here would call into question if this was just a “return to normal rally” (essentially a bull trap) or if this was truly setting the stage for new highs?
If we go up, key resistance levels include the bearish order blocks formed by previous ranges at Resistance 1 and Resistance 2 as marked on the chart. Here a rejection at Resistance 1, and thus a failure to make a higher high, would hammer in the idea of a "return to normal rally," which would be common for the start of a bear market.
Right now our Fractal Trend (red background color) and Directional Bias (yellow line) have a short bias and form this perspective we would expect more downside. However, our Scalper has a short term long bias. Thus, we might see this as a potential inflection point and are therefore looking for action to trade the trend wherever it goes.