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comment: Big gap above up to 21500 and decent bullish island gap below down to 19950. My base case is that we will be in a big trading range for a long time but given that the past 2 weeks were one of the wildest and most erratic the stock markets have ever seen, it’s a tough guess. The lower bound is the bull trend line from the covid lows and the upper one from the ath. Does knowing the range 19000 - 22500 help you much with trading? Depends. Try to only go for fading the extremes or on very good momentum.
current market cycle: bear trend but very likely that we have seen the lows and have transitioned to a trading range
key levels: 19000 - 21500
bull case: Bulls created an island gap to 20300 and if they an keep that open, they can try to poke more at the bear trend line around 21500. So far their only arguments are that they prevent the market from closing below 19500 and above the bull trend line but they need daily closes above 20000. Thu + Fr they tried to make 20300 support but the closes were bearish enough that more bulls will likely wait for lower prices again. The middle of this range is 20350 and that was the most neutral price last week.
Invalidation is below 19000.
bear case: Bears had to take profits or they were gone very fast last week. Wild up and down with a neutral close into the weekend, maybe slightly more bullish than bearish. Bears are still in control until the bear trend lines are broken. Bears could technically see the last week as a two-legged pull-back to the daily 20ema and the 50% retracement of the current bear trend. Market turned down violently from there and that’s good for the bears. Now they need to close the bull gap down to 20000 and get a daily close below again, since the 3 days where market dropped below it, closed bullish.
Invalidation is above 21700.
short term: Neutral. Market is in balance at 21350. Bulls need a higher high above 21700 to end this bear trend and bears a daily close below 20000 to show acceptance at these low prices. My base case for next week is that the highs and lows will hold and we continue to contract under 21600 and above 19800.
medium-long term from 2024-03-16: Bear trend is ongoing but for now I still think 19500 and below is an amazing buy if you can hold for years. Things will have to turn really bad for this market to find acceptance below the bull trend line from the covid lows and right now this trade war is just front running. Markets were not priced for risk 3 weeks ago but this drop was too much too fast. My bearish targets for this year are met and with the current environment I will not call for lower prices than 19000. If the trade war turns real bad, yeah sure but for now it’s not.
current swing trade: Swing shorts above 21000 and swing longs below 19800.
chart update: Highlighted gaps and not much else
comment: Big gap above up to 21500 and decent bullish island gap below down to 19950. My base case is that we will be in a big trading range for a long time but given that the past 2 weeks were one of the wildest and most erratic the stock markets have ever seen, it’s a tough guess. The lower bound is the bull trend line from the covid lows and the upper one from the ath. Does knowing the range 19000 - 22500 help you much with trading? Depends. Try to only go for fading the extremes or on very good momentum.
current market cycle: bear trend but very likely that we have seen the lows and have transitioned to a trading range
key levels: 19000 - 21500
bull case: Bulls created an island gap to 20300 and if they an keep that open, they can try to poke more at the bear trend line around 21500. So far their only arguments are that they prevent the market from closing below 19500 and above the bull trend line but they need daily closes above 20000. Thu + Fr they tried to make 20300 support but the closes were bearish enough that more bulls will likely wait for lower prices again. The middle of this range is 20350 and that was the most neutral price last week.
Invalidation is below 19000.
bear case: Bears had to take profits or they were gone very fast last week. Wild up and down with a neutral close into the weekend, maybe slightly more bullish than bearish. Bears are still in control until the bear trend lines are broken. Bears could technically see the last week as a two-legged pull-back to the daily 20ema and the 50% retracement of the current bear trend. Market turned down violently from there and that’s good for the bears. Now they need to close the bull gap down to 20000 and get a daily close below again, since the 3 days where market dropped below it, closed bullish.
Invalidation is above 21700.
short term: Neutral. Market is in balance at 21350. Bulls need a higher high above 21700 to end this bear trend and bears a daily close below 20000 to show acceptance at these low prices. My base case for next week is that the highs and lows will hold and we continue to contract under 21600 and above 19800.
medium-long term from 2024-03-16: Bear trend is ongoing but for now I still think 19500 and below is an amazing buy if you can hold for years. Things will have to turn really bad for this market to find acceptance below the bull trend line from the covid lows and right now this trade war is just front running. Markets were not priced for risk 3 weeks ago but this drop was too much too fast. My bearish targets for this year are met and with the current environment I will not call for lower prices than 19000. If the trade war turns real bad, yeah sure but for now it’s not.
current swing trade: Swing shorts above 21000 and swing longs below 19800.
chart update: Highlighted gaps and not much else
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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.