The S&P500 index is having a very aggressive sell-off following Jerome Powell's remarks on a 50 basis point hike in May. As you see on the chart, the rejection took place on the 1D MA200 (orange trend-line), broke below the 1D MA50 (blue trend-line) and is about to test today the 1D MA400 (green trend-line).
Why the 1D MA400 is so important? Because during the February - March 'war' correction, it provided support twice (on Feb 24 and March 15). Besides the 1D MA400, the price just hit the 0.236 Fibonacci retracement level (4220 roughly). Fibonacci retracement levels during this 2022 correction have been instrumental in forming Support and Resistance levels. As shown on the chart, the 0.786 Fib has rejected the price 2 times (including Powell's rejection on the 1D MA200), the 0.5 Fib has supported 2 times while the 0.236 once. Additionally, the 1D CCI is approaching the first buy level.
But perhaps the most important development of all is the formation of an Inverse Head and Shoulders pattern (IH&S) where today's low is the Right Shoulder and is exactly symmetrical as the Left Shoulder. IH&S patterns are technically bullish reversal structures and typically form the bottom of downtrends. The trading levels during the current days may be the last chance and a unique opportunity to buy before a strong Q3/Q4 rally to new All Time Highs.
To be a right should it can not go lower then 4150 and it is way to early to make that call
Solldy
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I think it's too early to tell, at this point it's worth watching the price action on the 400MA. Thanks for the idea!
The_Golden_Well
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It’s not complete yet but with the potential of good earnings coming this week from the biggest names in the S&P, you may be right before it even happens. Good luck all
smithgroupone
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The FOMC wants the markets to go down.....don't fight the fed.
benbllngr
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Is it "completed" or does the right shoulder still need to complete at the neck line above?