This is a critical week for the market and the indices. Short term fibs, price actions support/resistance, key moving averages, and volume profile shown. A bullish descending broadening wedge (thepatternsite.com/dbw.html) is the primary pattern identified. Analysis is provided for SPY to assess volume trends and to align with tradable levels on the ETF.
In Friday's session, we reclaimed the 50 day moving average, historically a key level. There are three possible scenarios I am seeing going forward.
The first in green is the bull case. A rally to break out of the descending broadening wedge with a daily close over the key 390 area which is showing confluence with the 78.6% fib and VPOC.
The second is the bear case. A test and rejection at this key level, or an immediate move downwards, could reach the 368-370 area and the 100 day MA. In the September correction, this level was visited once the 50 day MA was lost.
The third, and arguably worst for trading, is the scenario in blue. This is chopping around in a range until the signing of the stimulus bill.
The best plan this week is to play price action, wait for confirmation, and avoid the over-saturation of news and analysis.
In Friday's session, we reclaimed the 50 day moving average, historically a key level. There are three possible scenarios I am seeing going forward.
The first in green is the bull case. A rally to break out of the descending broadening wedge with a daily close over the key 390 area which is showing confluence with the 78.6% fib and VPOC.
The second is the bear case. A test and rejection at this key level, or an immediate move downwards, could reach the 368-370 area and the 100 day MA. In the September correction, this level was visited once the 50 day MA was lost.
The third, and arguably worst for trading, is the scenario in blue. This is chopping around in a range until the signing of the stimulus bill.
The best plan this week is to play price action, wait for confirmation, and avoid the over-saturation of news and analysis.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.