SPX: Should we panic now? Let's see.
Hello traders and investors! Ok, the SPX did exactly what we mentioned it would in our last public analysis (link below). Let’s see what’s next.
In the 1h chart, it lost the black line at 4,453 in one single bearish leg. When this happens, hardly the index keeps dropping. The market requires clear bearish structures in order to engage bearish trends, and when we see drops like this, they are usually just mini-crashes.
The market is driven by emotions, and panic is just one of them. Either way, the market will always find its balance, and we’ll always find something interesting. It seems the index is trying to stabilize now, and to many people, the area where it is now is not that important, but to me, it is a very special support area.
In our last analysis, I mentioned that if it lost the black line in the 1h chart, along with the 38.2% retracement, we would see it retesting the 61.8% retracement, and this is the exact same point that has been holding the index in the last few hours.
Statistically speaking, when the index initially respects the 38.2% retracement, when it loses this retracement it usually ignores the 50% and goes right to the 61.8%. This is why I said what I said last Friday. Again, link below.
Now, what can we expect? Well, unfortunately, we see no meaningful bullish structure. The index is stabilizing at 61.8%, yes, but so far there’s nothing that could convince me it’ll go up from here. If we don’t see a clear and good reaction by tomorrow, then the 61.8% will no longer hold the price, and it could fall to the 4,278 area (previous support in the daily chart).
However, if the SPX is about to react, now is a great time to do so. Any bullish structure would be more than welcome. For now, I’m neutral, and I’ll keep you guys updated every day on it, so remember to follow me to keep in touch with my analyses.
Have a good day,
Nathan.
In the 1h chart, it lost the black line at 4,453 in one single bearish leg. When this happens, hardly the index keeps dropping. The market requires clear bearish structures in order to engage bearish trends, and when we see drops like this, they are usually just mini-crashes.
The market is driven by emotions, and panic is just one of them. Either way, the market will always find its balance, and we’ll always find something interesting. It seems the index is trying to stabilize now, and to many people, the area where it is now is not that important, but to me, it is a very special support area.
In our last analysis, I mentioned that if it lost the black line in the 1h chart, along with the 38.2% retracement, we would see it retesting the 61.8% retracement, and this is the exact same point that has been holding the index in the last few hours.
Statistically speaking, when the index initially respects the 38.2% retracement, when it loses this retracement it usually ignores the 50% and goes right to the 61.8%. This is why I said what I said last Friday. Again, link below.
Now, what can we expect? Well, unfortunately, we see no meaningful bullish structure. The index is stabilizing at 61.8%, yes, but so far there’s nothing that could convince me it’ll go up from here. If we don’t see a clear and good reaction by tomorrow, then the 61.8% will no longer hold the price, and it could fall to the 4,278 area (previous support in the daily chart).
However, if the SPX is about to react, now is a great time to do so. Any bullish structure would be more than welcome. For now, I’m neutral, and I’ll keep you guys updated every day on it, so remember to follow me to keep in touch with my analyses.
Have a good day,
Nathan.
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