CFD Update: SPX500 Weekly Reversal Pattern Forming?
Hi, and welcome to Wednesday’s update. Stocks have been enjoying a solid run this month. So far, we have seen 6.80% added on the SPX500, 10.58% added on the US30, and 7.34% added on the NDX100. Despite high inflation, a hawkish fed, and threats of higher rates, buyers have continued to see value in the last few weeks.
We have started to notice a reversal pattern forming on some of the key indices. The pattern we can see forming could be an inverse head and shoulders pattern, and these are typically reversal patterns once confirmed.
Looking at today’s weekly chart, you will see the points we have noted being shoulder one and the head. We need to see the second shoulder form and a higher break to confirm the pattern. Yes, it is early days, but if we get the second shoulder and confirmation on the weekly chart, this could be a great sign that the correction could be over.
Beware of a new move lower that tests or closes below 3550. This could be a sign that the pattern has failed.
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