Some mixed signals, but I think we'll go a bit lower.
Ideal setup is to look for the retests of the big 76 breaks.
Divergences in how indices are trading makes for more mixed signals, but due to lack of recent bull momentum currently there’s a slight bias lower. Let’s look at the different indices and important support/resistance zones for them.
Divergences
We’ve had various divergences going on for a while. Sometimes we’re indices acting completely different from each other. For example, here SPX made a new high while Nasdaq and the other indices traded quite flat.
By simple book rules, we have two different things going on here. A new high generally implies a bullish outlook and holding a shallow rally inside of a big drop often can imply a second drop to come. Given the SPX breakout was very weak (Didn’t go far) I feel the odds are a bit more to the bears.
Current price action honestly I think is close to a coinflip. Bit of a bias towards a bear move but this is not based on anything that can not change quickly. A more important factor here is we’ve not yet retested the break levels and with us not having yet retested, there’s a good chance we will - which would also imply lower.
In a trend continuation broken levels will retest most of the time. Only in the strongest of conditions do they not. Given the overall context of current indices moves, being willing to bet on the strongest conditions is not the worst idea, but it needs reviewed when we’re not seeing strong conditions.
Spots for limit orders
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