SPX Trump Tarrif Bloodbath…
The SPX just experienced a brutal 21% drop from its previous all-time highs, wiping out an entire year’s worth of gains in just a few short weeks.
However, the market has found support at a critical level — the golden pocket between the 0.5 and 0.618 Fibonacci retracement levels. This area also aligns with the Anchored VWAP, offering solid support around the 4900 level. Despite the recent turbulence, we’re still holding within the rising parallel channel that’s been supporting the broader bullish trend.
Holding this confluence zone (Fib + AVWAP) would be a strong signal for a potential continuation higher.
That said, I’ve highlighted a potential capitulation zone between 4450 and 4070. While reaching that level would require a powerful impulsive correction from here, it’s wise to be aware of what’s still on the table.
We’ve also formed a bullish shark fin, and the RSI briefly dipped below the oversold 20 level. Historically, when the weekly RSI hits that extreme, it’s often marked excellent entry points.
But let’s not get ahead of ourselves — we also need to consider the pattern seen in the last major correction: a bounce to the 30 RSI level, followed by a lower low that formed bullish divergence. I’m watching closely for a similar setup, which would suggest another leg down after this interim rally.
Key resistance now sits near the 50-week SMA, currently between 5480 and 5680. Both the 21 and 50 SMAs are starting to curl down — something to watch, as they could act as headwinds going forward.
One last thing: the last time we lost the 50 SMA on the weekly, it took nearly 260 days of correction before we finally reclaimed it (that’s the green line on the chart).
Bottom line — buckle up. If we lose the lower bound of the rising channel (around 4900 on a weekly close), I’m expecting more downside ahead.
The SPX just experienced a brutal 21% drop from its previous all-time highs, wiping out an entire year’s worth of gains in just a few short weeks.
However, the market has found support at a critical level — the golden pocket between the 0.5 and 0.618 Fibonacci retracement levels. This area also aligns with the Anchored VWAP, offering solid support around the 4900 level. Despite the recent turbulence, we’re still holding within the rising parallel channel that’s been supporting the broader bullish trend.
Holding this confluence zone (Fib + AVWAP) would be a strong signal for a potential continuation higher.
That said, I’ve highlighted a potential capitulation zone between 4450 and 4070. While reaching that level would require a powerful impulsive correction from here, it’s wise to be aware of what’s still on the table.
We’ve also formed a bullish shark fin, and the RSI briefly dipped below the oversold 20 level. Historically, when the weekly RSI hits that extreme, it’s often marked excellent entry points.
But let’s not get ahead of ourselves — we also need to consider the pattern seen in the last major correction: a bounce to the 30 RSI level, followed by a lower low that formed bullish divergence. I’m watching closely for a similar setup, which would suggest another leg down after this interim rally.
Key resistance now sits near the 50-week SMA, currently between 5480 and 5680. Both the 21 and 50 SMAs are starting to curl down — something to watch, as they could act as headwinds going forward.
One last thing: the last time we lost the 50 SMA on the weekly, it took nearly 260 days of correction before we finally reclaimed it (that’s the green line on the chart).
Bottom line — buckle up. If we lose the lower bound of the rising channel (around 4900 on a weekly close), I’m expecting more downside ahead.
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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.