US stock markets such as the S&P 500 have reached the monthly supply zone on the right shoulder. The upside may continue as the daily uptrend continues. And below that is a weekly demand zone that could potentially provide support. However, if the rebound fails here or a correction pattern is made, the high will be the first monthly correction trend line of the downtrend, meaning it will descend into the yearly demand zone as shown on the right side of the chart. And there will be a big rebound, which could also be made into a tens of months correction pattern. The reason is that the rising impulse from March 2020 is seen as part of a very large correction pattern, and the high point can be the starting line of the yearly correction trend of the downward wave. If so, the US market could see a bearish market in a downturn for years. Since the market has to create a very large correction pattern, the target for the bearish wave will be a position to break the last yearly correction trend line of the bullish wave.
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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.