S&P still very strong; rally goes on
Last week began with bearish consolidation, which was short-lived. The bulls quickly regained control, established a daily higher low, and broke through the previous week's resistance at 524.1. Although the breakout was not very strong, it was still meaningful. The March close was very strong, posting a +3% gain, and both weekly and daily charts are indicating an uptrend. All major sectors appear strong. The bulls have full control, and the rally is likely to continue.
This week is heavily loaded with economic data releases, which might cause some volatility. However, unless there are major surprises, it should not affect our main thesis.
Important level to watch is 518.4. As long as it holds, buyers are in control
Disclaimer
I don't give trading or investing advice, just sharing my thoughts.
This week is heavily loaded with economic data releases, which might cause some volatility. However, unless there are major surprises, it should not affect our main thesis.
Important level to watch is 518.4. As long as it holds, buyers are in control
Disclaimer
I don't give trading or investing advice, just sharing my thoughts.
Comment:
On Monday, the price encountered some resistance near previous high, coupled with inactivity of large buyers. Although it has formed a double top on the daily chart, I wouldn't give much weight to it yet. As long as 518.4 holds, we are in a daily uptrend, and bulls have control.
Comment:
Tuesday was a very tricky day. A significant sell-off began even before the market opened and continued for the first hour of regular trading hours (RTH). I tried to identify what served as a trigger but couldn't find any clear link. There were no major economic releases, except for the Job Openings report, which came out much later. Some commentators have connected it to Tesla's report, but Tesla has been weak since January, so I doubt it could have surprised the market to such an extent.
Instead of trying to guess the reason, it is more important to observe the price action:
1. First, the weekly trend low of 518.4 was breached. I've previously noted that this is a very important level for the bulls. Technically, the trend has reversed, and weekly consolidation has begun.
2. Second, the day closed above 518.4. This is a strong bullish signal - a failed breakout. If sellers were strong, they should not have allowed this to happen.
These are very contradictory signals, and it is hard to construct a solid thesis.
My subjective reading is still a “buy” for a number of subtle signs but if you have low risk tolerance it is better to stay aside and wait for more clarity.
Instead of trying to guess the reason, it is more important to observe the price action:
1. First, the weekly trend low of 518.4 was breached. I've previously noted that this is a very important level for the bulls. Technically, the trend has reversed, and weekly consolidation has begun.
2. Second, the day closed above 518.4. This is a strong bullish signal - a failed breakout. If sellers were strong, they should not have allowed this to happen.
These are very contradictory signals, and it is hard to construct a solid thesis.
My subjective reading is still a “buy” for a number of subtle signs but if you have low risk tolerance it is better to stay aside and wait for more clarity.
Comment:
Wednesday began well for the buyers. A positive PMI report helped propel the price above the previous day's high and fill the gap. The new price found acceptance, but further movement was hindered by a lack of support from large buyers. At the end of the day, bears exploited this weakness to push the price down, but they failed to break through the open.
Overall, buyers have slightly improved their position, but they have not yet regained control.
Overall, buyers have slightly improved their position, but they have not yet regained control.
Comment:
Thursday saw very confusing price action. There was a gap-up open, price found acceptance but again lacked support from major buyers to move higher. Capitalizing on market weakness, sellers drove the price down spectacularly, breaking through all support levels. The day closed with a huge red outside bar. The market appears to have reached exhaustion, with sellers now controlling the weekly timeframe. The short-term outlook shifts to 'sell,' but it's important to remember that the market is still in a weekly uptrend and the bulls are not out of the game yet.