SPX ended the week in its lowest levels with a poor close on Friday. But technical indicators may be showing that a sideways-bottom may be forming as we get more sell exhaustion and buyers nibble on the hopes that things will turn itself around. As you can see from the chart a few things need to happen here. One is that the RSI needs to break above its current wedge formation and move higher. Second, the VI indicator needs to make a move to move above the moving average, one which appear to be trying hard to make a turn upward on the daily chart. Third, we would like to see some consolidation of price and perhaps a move sideways next week as the prior mentioned indicators point in the right direction, and give the buyers time to gather up and make that upward move.
You can see the similar type of consolidation move back in the Aug-Sep 2019 time period on the chart; of course this wasn't coming after a -35% drop, but a pause to see if the bullish move higher would continue. Withstanding a big disappointment from the Fed or the US government, or another terrible data concerning the virus or the economy, i think markets are hopeful to get in some buying period and relieve the bears of their incessant selling up to this point of any kind of rallies.
I think if we do make this move higher, we will get up to around the 2500 level, back to where the 11 year long trendline was breached, and we will retrace back to those levels before deciding on the next move.
You can see the similar type of consolidation move back in the Aug-Sep 2019 time period on the chart; of course this wasn't coming after a -35% drop, but a pause to see if the bullish move higher would continue. Withstanding a big disappointment from the Fed or the US government, or another terrible data concerning the virus or the economy, i think markets are hopeful to get in some buying period and relieve the bears of their incessant selling up to this point of any kind of rallies.
I think if we do make this move higher, we will get up to around the 2500 level, back to where the 11 year long trendline was breached, and we will retrace back to those levels before deciding on the next move.