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SPX - The selloff regains a momentum

In our last post on SPX, we were bullish after the bullish breakout from the rectangle pattern. We noted that we would pay close attention to the price action, and if retracement occurred, it would pose our bullish thesis to question. One day later, the breakout became invalidated; furthermore, the SPX fell more than 5% within two trading sessions. We are currently bearish on SPX, and we think it is likely for the SPX to test February 2022 lows in the short term.

Illustration 1.01

The picture above shows the invalidation of the bullish breakout.

Technical analysis - daily time frame
RSI, MACD, and Stochastic are bearish. The same applies to DM+ and DM-. ADX contains a low value. However, it started to increase on 21st April 2022. We will observe whether the price action will manifest more weakness in the following days; and if it will lead to the further rise of ADX. Overall, the daily time frame is bearish.

Technical analysis - weekly time frame
RSI, MACD, and Stochastic are all bearish. The same applies to DM+ and DM-. ADX shows a resumption in the bearish trend. Overall, the weekly time frame is bearish.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.