Lots to briefly discuss. Since the ES Futures are up, I'm assuming we'll have at least a small gap up tomorrow. This rally is very much living on borrowed time, so it could capitulate at literally any moment. Have your wiles about you. Be prepared for a selloff at any moment. The market is a tinder box right now.
Several technicals are at play right now. If we push above the high made on the 29th, it will totally discourage the bears and probably trigger a lot of stop losses which could lead to a short squeeze. This would invalidate the head and shoulders, but that is not necessarily a reason to be bullish.
There is a gap in the volume profile just above us (yellow arrow) which means that a move up to the 200 day simple moving average (red arrow) won't be too difficult. That number comes in at SPY 299.77 right now. That moving average might be the key. If you go back to previous bear markets, there was always an initial selloff, then an eventual retest of that 200 day simple moving average before the big drop. In the case of past bear markets that took months, but we might as well get it over with now since we're so close. In fact, that may be just what the market is trying to do. If we touch it now, we won't need to check in with it again for along time (months).
In past recessions, we rallied back to it months after the initial drop, but that was the moment that the bad economic data started coming out and so the big drop happened. In the case of the present day, the bad economic data (especially jobs) has come out fast because we are all laid off so fast, so it makes sense to hit that moving average now. There is also a thin gap made on the 5th & 6th of March up there that we can close.
All of this is about 2% above us and so is within reach. On the other hand, one reason we might drop right away is that we are sitting right under the 61.8% fib, which is serving as resistance. We may just gap over it in the morning, so, perhaps that hurdle will be removed. If we do push higher, don't expect it to go on for more than a couple of days.
Interestingly, this will coincide with the Bitcoin "halvening," in which case it could either soar or collapse. Weird!
Several technicals are at play right now. If we push above the high made on the 29th, it will totally discourage the bears and probably trigger a lot of stop losses which could lead to a short squeeze. This would invalidate the head and shoulders, but that is not necessarily a reason to be bullish.
There is a gap in the volume profile just above us (yellow arrow) which means that a move up to the 200 day simple moving average (red arrow) won't be too difficult. That number comes in at SPY 299.77 right now. That moving average might be the key. If you go back to previous bear markets, there was always an initial selloff, then an eventual retest of that 200 day simple moving average before the big drop. In the case of past bear markets that took months, but we might as well get it over with now since we're so close. In fact, that may be just what the market is trying to do. If we touch it now, we won't need to check in with it again for along time (months).
In past recessions, we rallied back to it months after the initial drop, but that was the moment that the bad economic data started coming out and so the big drop happened. In the case of the present day, the bad economic data (especially jobs) has come out fast because we are all laid off so fast, so it makes sense to hit that moving average now. There is also a thin gap made on the 5th & 6th of March up there that we can close.
All of this is about 2% above us and so is within reach. On the other hand, one reason we might drop right away is that we are sitting right under the 61.8% fib, which is serving as resistance. We may just gap over it in the morning, so, perhaps that hurdle will be removed. If we do push higher, don't expect it to go on for more than a couple of days.
Interestingly, this will coincide with the Bitcoin "halvening," in which case it could either soar or collapse. Weird!