Disclaimer: I still learning about Technical Analysis, so sorry in advance by any mistakes in my analysis.
Looking at the S&P 500 from a Technical point of view looks like we have an Elliott corrective wave (ABC), by the rule, Wave B is usually 50 % or 61.8 % of the Wave A, levels which the index managed to close below in higher time frames (Daily and Weekly chart). So, considering a new corrective Wave C, we can project by the Elliot rule using Fibonacci retracement that this Wave C, can be 61.8 % or 100 % of Wave A, which gives us the following targets
61.8 % of Wave A - 2168.2
100 % of Wave A - 1682.0
The interesting catch here that the 100 % target put the price close to a curious place, close to the top region of the Dot-com bubble and U.S housing bubble, and the 200 moving average (month), a place that could work as great support, for the price try to bounce back.
Besides a new wave of contamination, another motive behind this downside movement could be this new round of tensions between the U. S and China, as Trump administration starts to raise the tone against China, blaming the country over the pandemic. Besides these possibilities, we have all this damage caused by the virus on the economy to take in yet, as unemployment is soaring at a scaring pace and its hard to know how all this stimulus package and debt will play out on the economy down the road.
Please feel free to share your comments and perspectives below, I'm still grinding my way to improve my analysis, so all feedback is welcome.
“Never give in. Never give in. Never, never, never, never—in nothing, great or small, large or petty—never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.” ― Winston Churchill
Looking at the S&P 500 from a Technical point of view looks like we have an Elliott corrective wave (ABC), by the rule, Wave B is usually 50 % or 61.8 % of the Wave A, levels which the index managed to close below in higher time frames (Daily and Weekly chart). So, considering a new corrective Wave C, we can project by the Elliot rule using Fibonacci retracement that this Wave C, can be 61.8 % or 100 % of Wave A, which gives us the following targets
61.8 % of Wave A - 2168.2
100 % of Wave A - 1682.0
The interesting catch here that the 100 % target put the price close to a curious place, close to the top region of the Dot-com bubble and U.S housing bubble, and the 200 moving average (month), a place that could work as great support, for the price try to bounce back.
Besides a new wave of contamination, another motive behind this downside movement could be this new round of tensions between the U. S and China, as Trump administration starts to raise the tone against China, blaming the country over the pandemic. Besides these possibilities, we have all this damage caused by the virus on the economy to take in yet, as unemployment is soaring at a scaring pace and its hard to know how all this stimulus package and debt will play out on the economy down the road.
Please feel free to share your comments and perspectives below, I'm still grinding my way to improve my analysis, so all feedback is welcome.
“Never give in. Never give in. Never, never, never, never—in nothing, great or small, large or petty—never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.” ― Winston Churchill
Comment:
The SMA 200 was " overcame ", but the candle pattern that closes above seems weak so, I'm going to consider this bearish perspective on the play for now. However, if the market manages to show some strengthen above this moving average I'm gonna change my mind.
Comment:
Trump comments somehow pumped the market and avoided a correction. So, for now, I will wait to see how the market will behave, and wait to see if a correction will begin any time soon.
Trade closed: stop reached
Patience is the key here.