Team TV, following my previous SPY forecast (Refer link below) I feel we have a solid formation of a rising wedge, which gives me more confidence is what might happen.
IMPORTANT:
Key thing to look for is the next trigger. It's clear that all the economic reports, such as jobless claims, negative earnings, negative guidance, declining demand across the board etc does not do neagate markets' bullish sentiment. Instead markets are focused on the hope of re-opening the economy and demand magically returns. No one even discussing the risk of a 2nd wave of corona, which is highly likely without a vaccine present.
We need a trigger.
There are 3 possibilities
1) Re-opening is delayed under advice from medical professionals, the risk of a second wave of corona is too high. I see this as least likely. US is pushing ahead with plans to re-open, but it could happen.
2) States re-open (One by one) only to realise no one wants to go out and spend money, so the demand expectation is crushed. Highly likely. Not going to happen before end of April.
3) States re-open but a second wave of corona appears. This will be the most significant trigger. Not going to happen before end of April.
However, following the rising wedge theory to confirm next direction.
Bearish Case
1) We need a 3rd touch on the upper wedge line. Most likely reject at the range of 293 to 296, where we close a gap and are rejected from either Fib 61.8% @ 293 or 200EMA @ 296.
2) Need to close below the lower wedge line after the 3rd touch on the upper line to confirm direction. Only then will the bull trap be complete. Then we head downwards to re-test recent lows.
Bullish Case
1) WE have a 3rd touch on the upper line
2) We get a close above the upper line, confirming the bulls are in control. Then we will need a re-think on the entire scenario.
Please share your thoughts on this.
Will the trigger or the chart pattern theory come first?
IMPORTANT:
Key thing to look for is the next trigger. It's clear that all the economic reports, such as jobless claims, negative earnings, negative guidance, declining demand across the board etc does not do neagate markets' bullish sentiment. Instead markets are focused on the hope of re-opening the economy and demand magically returns. No one even discussing the risk of a 2nd wave of corona, which is highly likely without a vaccine present.
We need a trigger.
There are 3 possibilities
1) Re-opening is delayed under advice from medical professionals, the risk of a second wave of corona is too high. I see this as least likely. US is pushing ahead with plans to re-open, but it could happen.
2) States re-open (One by one) only to realise no one wants to go out and spend money, so the demand expectation is crushed. Highly likely. Not going to happen before end of April.
3) States re-open but a second wave of corona appears. This will be the most significant trigger. Not going to happen before end of April.
However, following the rising wedge theory to confirm next direction.
Bearish Case
1) We need a 3rd touch on the upper wedge line. Most likely reject at the range of 293 to 296, where we close a gap and are rejected from either Fib 61.8% @ 293 or 200EMA @ 296.
2) Need to close below the lower wedge line after the 3rd touch on the upper line to confirm direction. Only then will the bull trap be complete. Then we head downwards to re-test recent lows.
Bullish Case
1) WE have a 3rd touch on the upper line
2) We get a close above the upper line, confirming the bulls are in control. Then we will need a re-think on the entire scenario.
Please share your thoughts on this.
Will the trigger or the chart pattern theory come first?
Need to see the following to confirm the downtrend.
1) A 3rd touch on the upper trend line
2) A close below the lower trend line
3) Confirmation candle after the breakout candle to the downside
Obviously some interesting developments happening! The next couple days will be crucial to decide!
I suspect this turning point will be sometime this week as forecasted!