S&P 500 08/11/2021
Updated
S&P 500 ideally needs a pull back from here to go higher for the following reasons;
a) We have reached the long-term upper trendline and this will offer very strong resistance.
b) RSI is very overbought. Clearly we are over-extended here and well above the 21 day EMA.
c) Momentum has been slowing. This is clear from just looking at the candlestick patterns. See doji formed close of 7th November. and today's price action.
d) VIX has created a double-bottom along a resistance level that has held for months and appears to only have one direction from here and that is broadly upwards.
I'm long-term very bullish but I think this impressive bull run needs to take a breather before we can re-gather significant upward momentum. I would never short this market.
Fundamentals still look good with a fairly strong earnings season even if higher inflation, labour shortages, increasing energy prices and supply constraints provide a bit of a headwind. I expect a continued up-trend with further support from the xmas run up and hopefully covid will ease as vaccinations and natural immunity rise.
This is not financial advice.
a) We have reached the long-term upper trendline and this will offer very strong resistance.
b) RSI is very overbought. Clearly we are over-extended here and well above the 21 day EMA.
c) Momentum has been slowing. This is clear from just looking at the candlestick patterns. See doji formed close of 7th November. and today's price action.
d) VIX has created a double-bottom along a resistance level that has held for months and appears to only have one direction from here and that is broadly upwards.
I'm long-term very bullish but I think this impressive bull run needs to take a breather before we can re-gather significant upward momentum. I would never short this market.
Fundamentals still look good with a fairly strong earnings season even if higher inflation, labour shortages, increasing energy prices and supply constraints provide a bit of a headwind. I expect a continued up-trend with further support from the xmas run up and hopefully covid will ease as vaccinations and natural immunity rise.
This is not financial advice.
Comment
Forgot to mention drop in volume as well!
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