SPX: Bull or Bear trap? Let's see...
Hello traders and investors! Let’s see how SPX is doing in this Multi Time Frame Analysis (MTFA)! This could be a bull or a bear trap, and here are the most important points to keep in mind.
We see a Dark Cloud Cover candlestick pattern under the 21 ema in the hourly chart. This is a bearish sign, and today’s rally could be just a short rally to its resistance and start a further drop, especially if SPX loses this red line at 3349, which would trigger a pivot.
Today, SPX filled the gap we talked about yesterday (green line at 3399), and it did a Bullish Engulfing at the black line, which is the pre-coronavirus All Time High (ATH).
Now, let’s look for more clues at the daily chart:
After SPX lost the purple trendline, the trend got weaker, and when this happens, it just look for more supports. In this case, the 21 ema is holding the price very well, but not before SPX retested its support at the first red line (3353). The movement was very technical, and we already discussed it yesterday, in my previous analysis (link below).
Today’s candlestick left a huge shadow under its body, which is very interesting. But before we jump to any conclusions, let’s take a quick look at the weekly chart:
Here’s the situation: If the hourly chart triggers a pivot by losing the red line at 3349, it would be a bull trap, and SPX can sink to the second red line seen in the daily chart (3280), or even this purple line, in the weekly chart (3232). The pivot point in the hourly chart is the same point of this week’s candlestick low.
To sum up, if the 3349 will be lost, we may see a pullback in the weekly chart.
On the other hand, in the daily chart we have a good shadow, and SPX is closing above the 21 ema. If it trades again above today’s candlestick high, it would trade again in bullish territory, above the purple trendline, and the sharper pullback will be ruined. I’m not saying it will go up, I’m not sure if it will have the strength. But we could see some erratic movement next. It would be another bear trap.
These are the most important points to keep in mind, and if this idea helped you, please, support it! And follow me to keep in touch with my daily analyses! Maybe you’ll find something helpful around here.
Stay safe, and have a great weekend.
We see a Dark Cloud Cover candlestick pattern under the 21 ema in the hourly chart. This is a bearish sign, and today’s rally could be just a short rally to its resistance and start a further drop, especially if SPX loses this red line at 3349, which would trigger a pivot.
Today, SPX filled the gap we talked about yesterday (green line at 3399), and it did a Bullish Engulfing at the black line, which is the pre-coronavirus All Time High (ATH).
Now, let’s look for more clues at the daily chart:
After SPX lost the purple trendline, the trend got weaker, and when this happens, it just look for more supports. In this case, the 21 ema is holding the price very well, but not before SPX retested its support at the first red line (3353). The movement was very technical, and we already discussed it yesterday, in my previous analysis (link below).
Today’s candlestick left a huge shadow under its body, which is very interesting. But before we jump to any conclusions, let’s take a quick look at the weekly chart:
Here’s the situation: If the hourly chart triggers a pivot by losing the red line at 3349, it would be a bull trap, and SPX can sink to the second red line seen in the daily chart (3280), or even this purple line, in the weekly chart (3232). The pivot point in the hourly chart is the same point of this week’s candlestick low.
To sum up, if the 3349 will be lost, we may see a pullback in the weekly chart.
On the other hand, in the daily chart we have a good shadow, and SPX is closing above the 21 ema. If it trades again above today’s candlestick high, it would trade again in bullish territory, above the purple trendline, and the sharper pullback will be ruined. I’m not saying it will go up, I’m not sure if it will have the strength. But we could see some erratic movement next. It would be another bear trap.
These are the most important points to keep in mind, and if this idea helped you, please, support it! And follow me to keep in touch with my daily analyses! Maybe you’ll find something helpful around here.
Stay safe, and have a great weekend.
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