Critical Period for the Markets - To Buy or Not to Buy
Not accounting for any fundamentals, the
SPX500USD
and the
US30USD
had a strong rejection from heading lower in 3 consecutive weeks.
Fundamentals will be required to decide whether the market is moving back to a long term BUY.
We hit a low of ~-20% from the highs on the DJIA and ~ -25% from the highs on the S&P500.
On multiple time frames, prices are in a key area.
From technical analysis on the daily chart:
1) potentially a double top was forming but did not break the neckline
2) then a double bottom is forming and now we're waiting to see if it breaks the neckline, which is also a major resistance
3) the double bottom formation was pushed up from a 1D demand area, which is also a 1M demand area.
Looking at the candle on a weekly chart, it shows a pretty strong rejection.
1) Price printed a lower low vs the previous week at 3721.6 vs 3741.6
2) Previous week was a bullish candle, and this week we have a bearish candle closing in the body of the previous week's candle.
3) Strong rejection candle printed on 14 Jul 2022 with huge wick, followed buy a very strong bullish candle
4) We're facing a resistance zone that was tested multiple times but failed to break.
I am expecting a potential fake out for price below 3950, but if candle closes higher, I think we can call buys. (purely based on technical analysis) With fundamentals, we could be more sure of the probability of how the market will move.
SPX500USD
and the
US30USD
had a strong rejection from heading lower in 3 consecutive weeks. Fundamentals will be required to decide whether the market is moving back to a long term BUY.
We hit a low of ~-20% from the highs on the DJIA and ~ -25% from the highs on the S&P500.
On multiple time frames, prices are in a key area.
From technical analysis on the daily chart:
1) potentially a double top was forming but did not break the neckline
2) then a double bottom is forming and now we're waiting to see if it breaks the neckline, which is also a major resistance
3) the double bottom formation was pushed up from a 1D demand area, which is also a 1M demand area.
Looking at the candle on a weekly chart, it shows a pretty strong rejection.
1) Price printed a lower low vs the previous week at 3721.6 vs 3741.6
2) Previous week was a bullish candle, and this week we have a bearish candle closing in the body of the previous week's candle.
3) Strong rejection candle printed on 14 Jul 2022 with huge wick, followed buy a very strong bullish candle
4) We're facing a resistance zone that was tested multiple times but failed to break.
I am expecting a potential fake out for price below 3950, but if candle closes higher, I think we can call buys. (purely based on technical analysis) With fundamentals, we could be more sure of the probability of how the market will move.
Comment:
Trade played out perfectly for buys on confirmation close above previous candle high, into strong resistance, and a short position still active from strong resistance.
Comment:
Looking to add SELL positions if price breaks 3860 and close with rejection.
Comment:
Here come's the expected fake out to 3950. If it closes back in range this today, or by the weekly chart, could expect further sells. Otherwise, the bias will be bullish.
Comment:
Fake out playing out well with Russian-Ukraine news that just hit the market.
Comment:
Trade idea invalidated. Up sides looking good.
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