SPX50 18 March 2025 Market Analysis

• Yesterday closed as a bull bar in its upper half with a long tail above.
  
• We said that the parabolic wedge (3 pushes - 28 Feb, 7 Mar, and 13 Mar). That increases the odds of a minor pullback. The pullback is currently underway.
  
  
• The bulls want the market to form a 2 legged sideways to up pullback.
  
• They need to create credible buying pressure - consecutive bull bars closing near their highs.
  
• Traders will see if they can continue to create follow-through buying.
  
• The next target for the bulls are the 20-day EMA or the January 13 low.
  
• For today, the bulls want a retest of yesterday's (Mar 17) high followed by another leg up.
  
  
• The bears see any pullback as minor. They expect at least a small second leg sideways to down to retest the Mar 13 low after the pullback phase.
  
• The 9-bar bear microchannel on the daily chart and the 4-bar bear microchannel on the weekly chart increases the odds of sellers above the first pullback. This remains true.
  
• That means the first pullback would likely only be minor.
  
  
• Because of the climactic selloff and parabolic wedge, the market may try to form a minor pullback which is currently underway.
  
• Traders will see the strength of the pullback. If it is strong (consecutive bull bars closing near their highs), they may look for a retest of the breakout point - Jan 13 low.
  
• If the pullback lacks follow-through buying (overlapping candlesticks, doji bars, bear bars, long tails above bars), the odds of another leg down increases and traders will sell the pullback.
  
• For now, traders will see if the bulls can create a strong retest of yesterday's (Mar 17) high followed by a breakout above.
  
• Or will the retest lacks follow-through buying, stalling around or below yesterday's high area? If this is the case, the market may selloff in the second half of the day.