The report below uses the Spy chart which is the Normal Trading House.
• The market traded lower earlier to retest the March 4 low but formed a higher low. The market then reversed higher into the close, closing the daily candlestick as a bull inside bar closing in its upper half.
• The bulls see the market trading in a broad bull channel and want the move to continue for months. They want an endless pullback bull trend.
• They want a retest of the all-time high (Dec 6) followed by a breakout and trend resumption. They see the current move (Mar 4) as a bear leg within the trading range.
• They want a reversal from a double bottom bull flag (Jan 13 and Mar 4) and a wedge (Feb 25, Feb 28, and Mar 4).
• They hope the bottom of the 22-week trading range will act as support. They want a failed breakout below the January 13 low. So far, the breakout below the trading range low has limited follow-through selling.
• At the least, they want a retest of the middle of the trading range (around the 20-day EMA). They must create a strong entry bar today (March 6) to increase the odds of the bull leg beginning.
• If the market trades lower, they want the November 4 or October 3 low to act as support.
• The bears got a reversal from a higher high major trend reversal, a wedge top (Dec 6, Jan 24, and Feb 19), and a smaller double top (Jan 24 and Feb 19).
• They see the market as being in a 22-week trading range.
• They got a bear leg to retest the January 13 low and hope to get a breakout followed by a measured move based on the height of the 22-week trading range.
• So far, the breakout below the January 13 low has limited follow-through selling.
• If the market trades higher, they want the bear trend line or the 20-day EMA to act as resistance.
• They want at least a small second leg sideways to down to retest the March 4 low after a pullback (bounce).
• So far, the market is trading in a 22-week trading range.
• The SPX broke below the January 13 low (Mar 4) but the follow-through selling has been limited.
• The move down is strong enough for traders to expect at least a small second leg sideways to down after a pullback (bounce).
• For now, traders will see if the bulls can create a strong bull entry bar today.
• Or will the market trade slightly higher, but stall and close with a long tail or a bear body instead?
• The bulls need to create consecutive bull bars closing near their highs to show that they are back in control.
• The bears must create a strong breakout below the January 13 low with follow-through selling to convince traders a breakout could be underway.
• Traders may BLSH (Buy Low, Sell High) within the trading range until there is a breakout from either direction with follow-through buying/selling.
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Related publications
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.