S&P ($SPX500USD) 🏢 | Are We Still Bullish on the Market?
📊 Bulls have been on a COVID recovery rampage despite some unrest in the streets. While we are seeing a pullback on some previously bullish S&P holdings (for example Apple and Microsoft) today, the market is still somewhat mixed as money flows into banks, airlines, etc. Overall there is no indication that the top is in, but there is some indication that a correction could be in order. Given that, let's map out some key levels and see if we can't create a plan for if and when we do see a pullback.
Resources: cnbc.com/2020/06/04/stock-market-today-live.html + marketwatch.com/story/the-next-10-up-in-the-sp-500-is-all-about-the-pandemic-recovery-and-its-doable-this-analyst-says-2020-06-04?link=MW_latest_news
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1. Fractal Trend is showing a strong uptrend (Navy colored bars) on the 1-hour timeframe.
2. With this strategy, we are looking for long setups in an uptrend and as such want to enter long on retests of bullish order blocks plotted by Orderblock Mapping (Navy colored lines) and/or bullish S/R levels plotted by Directional Bias (Navy colored lines).
3. The plan here is to get an entry from the breakdown of the rising wedge illustrated on the chart. While we do think a pullback is in the cards, we should note here we don't give this pattern a lot of weight given it is on a lower timeframe (not as many people will see or react to lower timeframe patterns in our experience). Our target for an entry on a potential pullback is the S1 orderblock and S/R flip cluster. This level keeps the bullish structure fully intact and has enough previous interaction to make this support likely to hold.
4. We have placed our stop well below S1 as we expect that level to absorb selling pressure. Any serious breach of S1 level means the S2 orderblock and S/R cluster which acted as a major pivot point in the past is likely in play, and so we would want to consider another setup there instead of trying to ride out our S1 entry.
5. Our target is R1, because R1 is the next logical point of resistance and as a bonus, gives us an attractive 1:5 R:R when paired with the rest of our setup.
With the trading plan noted, there are actually many levels of interest on the chart that we haven't discussed yet. Above we have R2 and R3, with R3 specifically being a range in which a reaction is likely since it is the range formed from the previous top. Below we have S3 - S6. Each lower support means a further loss of bullish market structure, so keep that in mind if and when these levels do come into play. The most vital levels for the bulls to hold are S5 and S6, otherwise, we would be in danger of a long term downtrend being formed.
Good luck traders, may the money printer ever go brrr!
Resources: cnbc.com/2020/06/04/stock-market-today-live.html + marketwatch.com/story/the-next-10-up-in-the-sp-500-is-all-about-the-pandemic-recovery-and-its-doable-this-analyst-says-2020-06-04?link=MW_latest_news
✨ Drop a comment asking for an update, we do NEW setups every day! ✨
Like, Comment & Follow to help the community grow 🎉🎉
---
1. Fractal Trend is showing a strong uptrend (Navy colored bars) on the 1-hour timeframe.
2. With this strategy, we are looking for long setups in an uptrend and as such want to enter long on retests of bullish order blocks plotted by Orderblock Mapping (Navy colored lines) and/or bullish S/R levels plotted by Directional Bias (Navy colored lines).
3. The plan here is to get an entry from the breakdown of the rising wedge illustrated on the chart. While we do think a pullback is in the cards, we should note here we don't give this pattern a lot of weight given it is on a lower timeframe (not as many people will see or react to lower timeframe patterns in our experience). Our target for an entry on a potential pullback is the S1 orderblock and S/R flip cluster. This level keeps the bullish structure fully intact and has enough previous interaction to make this support likely to hold.
4. We have placed our stop well below S1 as we expect that level to absorb selling pressure. Any serious breach of S1 level means the S2 orderblock and S/R cluster which acted as a major pivot point in the past is likely in play, and so we would want to consider another setup there instead of trying to ride out our S1 entry.
5. Our target is R1, because R1 is the next logical point of resistance and as a bonus, gives us an attractive 1:5 R:R when paired with the rest of our setup.
With the trading plan noted, there are actually many levels of interest on the chart that we haven't discussed yet. Above we have R2 and R3, with R3 specifically being a range in which a reaction is likely since it is the range formed from the previous top. Below we have S3 - S6. Each lower support means a further loss of bullish market structure, so keep that in mind if and when these levels do come into play. The most vital levels for the bulls to hold are S5 and S6, otherwise, we would be in danger of a long term downtrend being formed.
Good luck traders, may the money printer ever go brrr!
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