Bullish and Bearish TA of SPX

20 ส.ค. 2022

SPX recently broke out of the steep bearish wedge that corresponded to a drop in the volatility index (VIX). The VIX broke through the higher lower trend, which is similar to 2008 and 2016, which were bearish and bullish examples. The difference is that in 2008, a lower low in price was made following the break down, whereas a higher low was made in price in 2016. SPX has been trading in a descending broadening wedge pattern over the moderate term, which had confluence to the touch of 200 day MA (kiss of death), which also happened in 08. The price is currently above the purple moderately long term trend line that makes up the top of megaphone pattern. Retracement should be expected at this point, but the bottom of this move may very well determine where the market is going. Anything at or less than a full retracement to create a double bottom, I would consider a point for becoming slightly more bullish. If it breaks past the previous low and goes toward the bottom of the broadening wedge, I would expect the VIX to come back and hit the trendline. This also happened in 08, before going into the last small bear market rally right before the capitulation event in September. Still more neutral until getting some confirmation on the move, but I would expect to start seeing signals over the next 2-3 weeks. The question really is, what are the tail risks that the market has not already considered. One I could think of is that most of the market is positioning as though the Fed is going to pull back on raising rates. If they continue with raising rates and QT, in the absence of serious credit market problem signals, IMO, this could be a reason for the SPX to continue downward.

20 ก.ย. 2022

บันทึก

RSI is showing some bullish divergence on the daily timeframe, however, the price broke the 0.618 fib retracement level. Still unclear if this is the start of a turnaround or consolidation before lower lows.