S&P confirmed yesterdays our worrying signals despite the new high at 1514. Last Thursday we first mentioned how cautious should be, because a correction towards 1470 was imminent. On Friday the market was strong and bounced right back up from the support level of 1497.
The breakout towards 1514 that followed gave some hopes that it the market was re-energised and was heading towards 1520 and why not higher. In our twitter update after Monday’s open we mentioned how crucial was the 1504 support for the bullish view. However the daily candle yesterday was so strong that took back the whole candle from Friday’s breakout and then some more.
For the time being this could just prove a shallow correction but a another break below 1496 will confirm the corrective nature of the decline. 1470 however is another important level as far as weekly prices are concerned. On a weekly level we would not want prices to close below that level. Why? Because our simple weekly EMA system gives a sell signal as shown below.
As always, thank you for taking the time to catch up on my thinking. If you need help trading this index, don’t hesitate to contact me.
A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.
The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.
Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.