Here is my take on SP500. We are currently seeing the price move to new all-time highs approaching the level of 3393.52 from last February. The question is what will happen next?
A few points:
- The price action is showing a clear bullish layout. The trend analysis does not suggest any change from the current direction.
- If we take a look at similar movements in the past, like the one that took place from September 2018 to May 2019, we can see how the price tends to score a new ATH just before falling back to the 50 days moving average and drop below it for a specular amount.
- The average investor sentiment is overall bearish. Generally, this is a contrarian indicator therefore suggesting that the market will grow.
Taking all of this into consideration we can draw the following conclusions:
At the moment there are more indications of a bullish continuation of the trend in act. I expect the price to reach a new ATH and cause a bullish shift in sentiment which in turn will lead to fear of missing out and a quicker rate of growth. Consequently, a lot of short sellers might be stopped out creating a bullish rush.
This will be the indication of the imminent reversal that should make the price of the index fall about 10%.
I plan on keeping my long positions open until these moves develop. However, I will also increase my SLs to safeguard against a sudden drop.
A few points:
- The price action is showing a clear bullish layout. The trend analysis does not suggest any change from the current direction.
- If we take a look at similar movements in the past, like the one that took place from September 2018 to May 2019, we can see how the price tends to score a new ATH just before falling back to the 50 days moving average and drop below it for a specular amount.
- The average investor sentiment is overall bearish. Generally, this is a contrarian indicator therefore suggesting that the market will grow.
Taking all of this into consideration we can draw the following conclusions:
At the moment there are more indications of a bullish continuation of the trend in act. I expect the price to reach a new ATH and cause a bullish shift in sentiment which in turn will lead to fear of missing out and a quicker rate of growth. Consequently, a lot of short sellers might be stopped out creating a bullish rush.
This will be the indication of the imminent reversal that should make the price of the index fall about 10%.
I plan on keeping my long positions open until these moves develop. However, I will also increase my SLs to safeguard against a sudden drop.