This might be one of the best long trade setups out there right now. I will post my analysis this evening; I hope in the meantime you can study the chart to see some indicator clues for yourself.
*** Strong bullish view is valid only if XBI closes over 86, AAPL closes over 152.60 (ideally 153), and SPX closes over 3915 (ideally 3930). Yes, I want all 3 conditions to be met.
*** Strong bullish view is valid only if XBI closes over 86, AAPL closes over 152.60 (ideally 153), and SPX closes over 3915 (ideally 3930). Yes, I want all 3 conditions to be met.
Comment:
To present the bearish view as well:
Comment:
Correction to main chart - I inverted the Fibonacci levels. So sorry! "1" should be at the bottom since that is full retrace from the recent top, which should be "0".
Comment:
Update on bullish view - XBI closed above 86, check. AAPL closed under the 50% Fib 152.60 but I like the close over 152.30. AAPL has a 151-152 support area and demand may increase 149-150. SPX was finally pulled down below 3900 and barely closed above, no good.
Here is a list of bullish leaning indicators that are shown in the main chart:
1- Yellow line 151-152 support area must hold
2- Support at 50% Fib retrace, 152.60
3- Last week's strong rally, ending 12Sep, came after a sharp move lower. It is common to see a second round of selling to new lows, which creates bullish divergence.
4- RSI gives support to #3. After peaking above 70 at the August top, RSI stayed over 33.33 and moved up as price made a lower close.
Three indicators not shown on the chart:
1- Price has bullish support from Ichimoku cloud
2- Stochastic %D indicates strength (%K needs to turn up to confirm)
3- Weekly chart - After rising for weeks, price retreated to the 20sma,151.91, which needs to hold as support for a next leg up
IMPORTANT - On one hand the white line paints a compelling picture (with above indicators) and this chart could "tip" a bullish bias into action. While I use my indicators with high confidence, there are times when 2-3 directional possibilities seem equally possible (up, down, sideways). This is why I also presented a bearish interpretation of what may come next. So please, do not load a position because someone else's chart looks convincing. Each new day's price action can change the author's outlook.
Here is a list of bullish leaning indicators that are shown in the main chart:
1- Yellow line 151-152 support area must hold
2- Support at 50% Fib retrace, 152.60
3- Last week's strong rally, ending 12Sep, came after a sharp move lower. It is common to see a second round of selling to new lows, which creates bullish divergence.
4- RSI gives support to #3. After peaking above 70 at the August top, RSI stayed over 33.33 and moved up as price made a lower close.
Three indicators not shown on the chart:
1- Price has bullish support from Ichimoku cloud
2- Stochastic %D indicates strength (%K needs to turn up to confirm)
3- Weekly chart - After rising for weeks, price retreated to the 20sma,151.91, which needs to hold as support for a next leg up
IMPORTANT - On one hand the white line paints a compelling picture (with above indicators) and this chart could "tip" a bullish bias into action. While I use my indicators with high confidence, there are times when 2-3 directional possibilities seem equally possible (up, down, sideways). This is why I also presented a bearish interpretation of what may come next. So please, do not load a position because someone else's chart looks convincing. Each new day's price action can change the author's outlook.