S&P 500 : Fractal pointing temporary correction before it surge

Hello traders,

Today, I wanted to talk about S&P 500 from fractal's perspective.




1. V shape valley
Back in March 2009 we had a steep decline due to financial crisis and eventually ended up forming V shape valley. This strong bounce back continues to go higher and break previous resistance that most traders think it can't go above this point. This is simply because traders were impacted by all the media talking about recession, fear, and risk.


2. Higher lows based on trend following double bottom
as it breaks and digests previous resistance area , it forms double bottom but important key is higher lows, which is one of the most important thing to have when utilizing trend following strategy. It is important for S&P to have this double bottom or triple bottom formation due to the fact that it forms short term resistance which will be turned in to support line if it breakouts.


3. Graveyard candle on right shoulder
It's forming H&S pattern and right shoulder is getting graveyard candle to have a little correction here which is healthy for bullish to come back. As it touches the resistance that formed previously in 2 stage, which is now changed to support line as price broke that line, it will test how strong this bull will be. Based on historical fractal perspective, we may have an aggressive correction than expected but that will be a good entry point to jump on it.


Good luck!