Hello Traders,
Looking at 4 hour chart for SPX, we saw significant bounce back today and it is currently testing top of the orange descending trend line.
$3400 is a very important level for SPX as it acted as resistance before covid pandemic and mid August. Additionally, 50 hourly moving average is also sitting around $3400, which means that bears are most likely to look for short plays.
For bearish scenario, I expect SPX to test lower part of descending orange trend line once again which will attract another dip buying. MACD bearish over is also about to happen, which increase the likelihood for another bearish play. For bullish entry, I am still waiting for hourly lower high to be set, which increase the odd of reversal (somewhere at purple line).
Happy Trading!!
Looking at 4 hour chart for SPX, we saw significant bounce back today and it is currently testing top of the orange descending trend line.
$3400 is a very important level for SPX as it acted as resistance before covid pandemic and mid August. Additionally, 50 hourly moving average is also sitting around $3400, which means that bears are most likely to look for short plays.
For bearish scenario, I expect SPX to test lower part of descending orange trend line once again which will attract another dip buying. MACD bearish over is also about to happen, which increase the likelihood for another bearish play. For bullish entry, I am still waiting for hourly lower high to be set, which increase the odd of reversal (somewhere at purple line).
Happy Trading!!
Now lets see how SPX is reacting to this mid-purple line. If we see reversal tomorrow, there is a very high chance of inverse head and shoulder pattern will take place. Break down below purple line would be a good bearish entry!