One of the most difficult unknowns to clear, circulating in the market these days, is to know if the 3rd attempt the indexSP500 can overcome the resistance of 1,130 points with no solvency or .
This question which in principle might seem an exercise more technical analysis is particularly important because it could mean that the major world markets return to a scenario with bullish bias and belief in a possible economic recovery.
The fact is that after receiving inquiries about unable to discern any clear for myself, nor the opinions expressed in articles by expert analysts have found that no one knows or dares to predict what can happen . In this search I stumbled upon this article: ”
Important Lessons From Market Internals Now and the Prior Two Rallies into Resistance ” certainly interesting for the type of analysis and which way to expose the most relevant points.
The analysis is based on the study of the current situation SP500 Timescale 15 minutes correlations with indicators that should accompany the price for the rise was reliable, compared with what happened in the previous two occasions (June and July) when the SP500 faced the mark of 1,130 points.
Breadth NYSE TICK and volume difference (of Breadth), not necessarily indicate a fall, but no longer a worrying sign: in graph a clear divergence or negative correlation of price indicators used seen.
In comparison with the two previous occasions:
- In June the same differences that now there was a false break, which was a bull trap that caught more than one trader to collapse in 10 days up to 1,010 points.
- In July there were also differences and in the days before the collapse that would take the index to 1,040 points, one falls and rebounds, which confused more than one series followed.
In both cases there was a strong desplone in days / weeks ahead .
In the end, the story can be repeated or not, but this study can take some interesting lessons:
- When the price is accompanied by long divergent momentum indicators, you can not define the maximum.
- Pay close attention to the latest rebounds (bullish traps), since precipitous entry can harm both bull and a bear, about to enter the opposite direction and the other the possibility to jump the stop losses.
- Eventually they market often turn after prolonged periods of massive divergences.
While the study ‘s author opts for the bearish scenario, who chooses to operate the SP500 could put the filters in 1,115 or 1,110 points for bearish entry and 1,140 points upward , and in this case also could be expected to further correction and testing in the area of 1,130 points. In any case it is advisable to opt for entries with a “generous” filter whether you opt for one way or the other, even if it means leaving to earn some points.
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