SPX closed with a small pin bar on huge volume last Friday, coupled with a potential bullish divergence between price and RSI (daily chart), it Looks like we can expect yet another bounce soon. However, divergence usually result in a short term reversal (lasting 2 or several candles) and may not translate into a longer term trend reversal.
The last 3 weekly candles of SPX has formed a broadening "pennant", a pattern that signify a market that has been highly volatile with little to show in direction in the last 3 weeks.
So while we may expect some bounce next, it is probably just more whip saws in the near term, especially when most of the market leaders (mostly the MAANGT stocks are still weak (except perhaps NFLX and TSLA) aren't showing signs of having bottomed yet.
While there may be some stocks that have started to break up from base formations, only a handful are able to successfully trend up without too much volatility.
Let's wait for S&P be able to rise above the longer term resistence line (red) eventually, then perhaps we will have a more sustainable market recovery. Meanwhile, stay safe.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
The last 3 weekly candles of SPX has formed a broadening "pennant", a pattern that signify a market that has been highly volatile with little to show in direction in the last 3 weeks.
So while we may expect some bounce next, it is probably just more whip saws in the near term, especially when most of the market leaders (mostly the MAANGT stocks are still weak (except perhaps NFLX and TSLA) aren't showing signs of having bottomed yet.
While there may be some stocks that have started to break up from base formations, only a handful are able to successfully trend up without too much volatility.
Let's wait for S&P be able to rise above the longer term resistence line (red) eventually, then perhaps we will have a more sustainable market recovery. Meanwhile, stay safe.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!