On October 27th in my previous idea I mentioned that we would keep an eye on SPX as we suspected that a move was coming due to the large bullish divergence spotted on the weekly RSI indicator and a move did indeed occur in swift fashion. But was that just the beginning of a potential wave in the market that is going to either send this market back down into the doldrums? Or is this going to be the beginning of testing higher prices so that an upward trend may finally begin to form?
The S&P500 has not made a significant higher high in price in well over a year. Yet, with that being said, there also hasn't been as nice a potential setup on the chart as this.. until now.
Monday's close could be the beginning of this major move as we see on the chart that the price action closed, JUST ABOVE a key area of resistance.. that being 3804.
What to look for now would be full body candle closes above this price level. Preferably green full body candle closes. Which is why tomorrow as well as this week in general will be very interesting.
If prices begin to hold on both the daily and weekly above this 3804 level, a potential rally to a zone of 4155 and 4311 would ensue. This would be my personal level of interest to be getting out of longs. These 2 prices are the 50% and 618 fibonacci levels. And as such, these would be very high likely areas where other fibonacci traders would be looking to sell. So on the chart, I show these as being the areas in which I would trade out of this setup due to the rules of which fibonacci retracement dictates.
Also, keep in mind that 4000 could still be a major area of resistance. This area is not discouraging but it could be a level that price action must spend time testing before the rally can continue once and if this level is hit.
In the meantime, keep an eye on where the market opens and closes tomorrow. The weekly bullish divergence on the chart has likely not yet finished playing out, and Monday's close could be the pin perfect price to catch this wave that I suspect is just in the beginning.
DISCLAIMER: This is commentary of my own personal observations and ideas. Please do your own research and invest responsibly. THIS IS NOT FINANCIAL ADVICE.
The S&P500 has not made a significant higher high in price in well over a year. Yet, with that being said, there also hasn't been as nice a potential setup on the chart as this.. until now.
Monday's close could be the beginning of this major move as we see on the chart that the price action closed, JUST ABOVE a key area of resistance.. that being 3804.
What to look for now would be full body candle closes above this price level. Preferably green full body candle closes. Which is why tomorrow as well as this week in general will be very interesting.
If prices begin to hold on both the daily and weekly above this 3804 level, a potential rally to a zone of 4155 and 4311 would ensue. This would be my personal level of interest to be getting out of longs. These 2 prices are the 50% and 618 fibonacci levels. And as such, these would be very high likely areas where other fibonacci traders would be looking to sell. So on the chart, I show these as being the areas in which I would trade out of this setup due to the rules of which fibonacci retracement dictates.
Also, keep in mind that 4000 could still be a major area of resistance. This area is not discouraging but it could be a level that price action must spend time testing before the rally can continue once and if this level is hit.
In the meantime, keep an eye on where the market opens and closes tomorrow. The weekly bullish divergence on the chart has likely not yet finished playing out, and Monday's close could be the pin perfect price to catch this wave that I suspect is just in the beginning.
DISCLAIMER: This is commentary of my own personal observations and ideas. Please do your own research and invest responsibly. THIS IS NOT FINANCIAL ADVICE.
