SPX500 Daily Chart breakdown 21/10/20
• Last weeks gain +0.73%
• This months gain +0.31% +4.84% from this months low.
• Current yearly gain +19.35%
Traders its been a strong year so for the SPX500, with buyers adding just over 19% since January. Trade tensions and phase 1 of the trade deal have been significant influences as have been US interest rates. This month the SPX500 has seen a strong turn around from its earlier lows. The SPX500 has rallied 5% since its October low.
Taking a look at the current daily chart; we can price is sitting a crossroads. Buyers and sellers have evidence supporting a case for new extension lower or a new extension higher.
On the buy-side. Price remains in a med-term uptrend after its last test of the current long term up trendline. We can clearly see the series of HLs supporting the current trend. Buyers have also broken the last med-term downtrend and have set up support from 2984.40. This is a key level on the short term as a break resumes seller pressure from 2993.20 – 3000. We would like to see buyers hold today’s session and make a new break of 3000 to show buyers remain in control of the current med-term uptrend.
On the sell-side. We can’t help but notice the LHs countering the HLs, price overall looks to be forming a wide wedge pattern. While resistance 3008.50 remains in play sellers still continue show signs of supply, with the current LH remaining valid.
It’s really up to buyers to lose this race (they maintain momentum atm with the current uptrend) if they can hold support and break resistance, the 1st LH should be invalidated and that sets up a new potential run at Septembers and beyond.
We will need to keep an eye on the trade talks between the US and China and the ongoing US economy worries, including the direction of the Federal Reserve.