SPX appears to be finding support around 3800 with last Friday closed way off its intraday low, forming a pin bar of sorts. This is an intermediate support (which is the 38.2% fib retracement of the major AB (covid crash recovery swing) swing up.
A short rebound from oversold position will not be unexpected. However there are a number of near term resistances on the way up :
1. downtrend channel (see daily chart)
2. previous support turned resistance around 4100-4200
The risk remains that a move towards the H&S target of around 3500 seem plausible (incidentally this is also the 50% fib retracement of the major AB swing up).
Reason being that consumer staple stocks (which are deemed defensive in a weak economy) have also broken down quite spectacularly last week (eg COST, WMT, TGT, DLTR).
It is likely we are in a bear territory (unlike previous "corrections") where stocks will take a while to bottom out. One week at a time now to reassess the stock market indices.
Swing/short term trading of any bounce is possible but need to have stop loss in place as it is "counter trend" trade.
p/s Nasdaq is already down to 50% fib retracement level of it's major AB swing. It will be interesting to see if it could go any lower (TSLA seem to be the weak link right now).
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
A short rebound from oversold position will not be unexpected. However there are a number of near term resistances on the way up :
1. downtrend channel (see daily chart)
2. previous support turned resistance around 4100-4200
The risk remains that a move towards the H&S target of around 3500 seem plausible (incidentally this is also the 50% fib retracement of the major AB swing up).
Reason being that consumer staple stocks (which are deemed defensive in a weak economy) have also broken down quite spectacularly last week (eg COST, WMT, TGT, DLTR).
It is likely we are in a bear territory (unlike previous "corrections") where stocks will take a while to bottom out. One week at a time now to reassess the stock market indices.
Swing/short term trading of any bounce is possible but need to have stop loss in place as it is "counter trend" trade.
p/s Nasdaq is already down to 50% fib retracement level of it's major AB swing. It will be interesting to see if it could go any lower (TSLA seem to be the weak link right now).
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!