SPX and NQ - are we there already?I am cautiously optimistic that the the correction that started since mid July could be finally over and we could begin to see more ups rather than downs going into the final 2 months of this year.
SPX did come very close to its H&S target while NQ was 4% shy of its H&S "target" (close enough though!) before we had a bullish reversal this week.
One could still argue that this could just yet another "sucker's rally" (aka bull trap) that we have seen numerous times in the past 3.5 months.
However, there are a few factors that gave hope for medium term bullish bias this time:
1. A pretty bullish (large body with almost no wicks) weekly reversal candle, though still in the making for this week
2. Both SPX's and NDX's Weekly RSI could be breaking out of their downward trendline, which often could be an "early" signal of strength in the coming weeks.
Non-technical aspects:
3. More earnings announced this week have been beating market expectations and their stocks are now bouncing off a lower base.
4. Fed announcing a pause in in interest rate hike yesterday.
That said, we still need to see the indices breaking above their strong trendline resistences (shown in Red) for a confirmation that the "correction" could be over, plus there is always a chance that the trend going forward could remain sluggish despite no longer "bearish".
Let's see!
Disclaimer:
This is just my own analysis and opinion for discussion and is NOT a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management (ie trailing stop loss and position sizing) is (probably the most) important!
Take care and Good Luck!
