Last week started with a bang, spiking 100 SPX points off the early Monday low, only to get more than a .618 Fibonacci pullback/retracement on Thursday & Friday.
Friday was especially weak sliding back over 64 points from the session’s early high to test the 4310-12 support zone, before a late snapback took them off the session lows.
The indices put on a remarkable surge early in the week in the face of war in Israel and other geo-political tensions including the ongoing Ukraine conflict. Jamie Dimon, JP Morgan CEO stated it best “The war in Ukraine compounded by last week’s attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geo-political relationships. This may be the most dangerous time the world has seen in decades.”
Based on my current analysis, my belief is that the indices are at a technical crossroads near KEY price support & trendlines. A rally early next week could propel the SPX to test price resistance near 4390-4400 (with the key 50-day moving average at 4404) A price /volume surge through that key level might propel the SPX to test the 4435-40 zone and then on to 4540-50, then a test of 4600, with a potential eventual technical target at the 4775-4800 zone.
However, If the late-week pullback exacerbates, breaking the near-term support, it will likely extend the current pullback even lower. Then a retest of important support near 4220-30 zone might quickly take place.
Of course, should that fail, it might set up a fast and sharp selling climax-type decline in a 5th wave lower to test the 4065-4100 zone, which could result in at least a short-term tradeable bottom. We may find out what the market has in store for us as early as Monday -Tuesday of next week.
And remember, Trade what you see, not what you think!
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