And that's a BIG maybe. I'm not sold on it. But as i've said in my past few posts we have poor market structure and gaps all the way down to the $293 area. This market has been resilient as **** and apparently it takes the possibility of a pandemic/end of the world to get any real selling. And there was real selling, particularly on Friday. Especially if the situation in China, and particularly globally, worsens this may be the excuse the market needs to pull back. I personally do not see this getting into correction territory but a modest pullback of 2-5% with the possibility of a momentum overshoot.
If it does worsen and the WHO deems this a "Global Health Emergency" it can have implications on travel, and trade. With ports and airports being closed. That is what the market is seeing as risk.
I've circled a confluence of trendlines from a variety of different time periods that all converge at about the same area/price. This also happens to be where the 20 period MA is residing. I do believe that if we break through these trendlines/MA with volume selling (institutional selling) we will see a larger move to the downside with TA traders using particularly the uptrend line from Oct and the 20 period MA as a sell signal on the daily. I've also marked all the gaps we have down to the $293 area. Sometimes these can act as magnets for price.
I believe if we do break through that confluence of trend line support we should see relative support through $324.50 - $320.50. If we break through there i do not see us having much in the form of brakes until down into the $312 - $310 area.
Again i honestly do not have high hopes for this to turn into a rout, but just trying to give the numbers for anyone who's interested in my analysis.
Stay safe, and wash your hands. Remember, any escalation in bad news for this outbreak is going to send the market lower., and a turn around into good news will send the market higher. Keep your head on a swivel.
I am about 50% short and 50% cash at this point with the majority of my downside positions still open via VIX and metals. I will most likely open a quarterly long strangle on SPY.
*This is not trading advice, this is for entertainment purposes only based off of my own personal TA
