S&P 500 Gap Down Open? | Oversold Bounce Imminent!
Hello Traders!
Today’s update will be on SPY, a big gap down with immense selling pressure coming in from a technical standpoint.
An oversold bounce will be imminent due to overextended oscillators
Points to consider,
- Key Moving Averages broken
- Local support at .50 Fibonacci
- RSI oversold
- Stochastics in lower regions
- Volume Climax nodes
SPY broken all moving averages with this impulse move down, clear increase in selling pressure as bulls fail to make a higher low, confirming the bearish divergence.
Local support is situated at the .510 Fibonacci; a gap down open will target .618 as next critical support.
The RSI is clearly oversold, indication of over extension, increasing the probability of an oversold bounce.
Stochastics is currently in the lower regions, can stay trading here for an extended period of time, however lots of stored momentum to the upside.
SPY has clear volume climax nodes, signalling seller exhaustion, another indication of a probable oversold bounce.
Overall, in my opinion, a gap down open will increase the probability of testing the .618 Fibonacci, oscillators by then will be well overextended, putting much more emphasis on a bounce.
What are your thoughts?
Please leave a like and comment,
And remember,
“Genuine acceptance that there will be losses on your way to market success will greatly decrease the hurt when they eventually come.” ― yvan Byeajee
Today’s update will be on SPY, a big gap down with immense selling pressure coming in from a technical standpoint.
An oversold bounce will be imminent due to overextended oscillators
Points to consider,
- Key Moving Averages broken
- Local support at .50 Fibonacci
- RSI oversold
- Stochastics in lower regions
- Volume Climax nodes
SPY broken all moving averages with this impulse move down, clear increase in selling pressure as bulls fail to make a higher low, confirming the bearish divergence.
Local support is situated at the .510 Fibonacci; a gap down open will target .618 as next critical support.
The RSI is clearly oversold, indication of over extension, increasing the probability of an oversold bounce.
Stochastics is currently in the lower regions, can stay trading here for an extended period of time, however lots of stored momentum to the upside.
SPY has clear volume climax nodes, signalling seller exhaustion, another indication of a probable oversold bounce.
Overall, in my opinion, a gap down open will increase the probability of testing the .618 Fibonacci, oscillators by then will be well overextended, putting much more emphasis on a bounce.
What are your thoughts?
Please leave a like and comment,
And remember,
“Genuine acceptance that there will be losses on your way to market success will greatly decrease the hurt when they eventually come.” ― yvan Byeajee