S&P 500 wedges - bullish to bearish continuation
I think I figured out what's going on here.
From what I've seen, it's fairly widely accepted that we broke out of a bullish descending wedge on 9/26, which is a continuation pattern. From there, we've continued to retrace key levels from the September selloff; but in the process, have worked ourselves into another wedge - this time, bearish.
Things I don't know:
1. If we will see the sub-3300 level again in November -- this level has withstood multiple retests recently.
2. Which trend will ultimately prevail -- I suspect bullish but there are signs of the economic recovery slowing.
Things I do know:
1. We will almost certainly not retrace to former all-time highs before the election -- that would be excessive.
2. At some point, this counter-rally will stall out, and backslide a bit -- how far, only time will tell.
Personally, I think it would be healthy for the S&P to come down to its 200-day moving average around 315-320 in order to reset prior to another bull run towards new highs. However, it is perfectly possible that it may come down only a little and trade sideways election is decided.
Feedback welcomed and encouraged.
From what I've seen, it's fairly widely accepted that we broke out of a bullish descending wedge on 9/26, which is a continuation pattern. From there, we've continued to retrace key levels from the September selloff; but in the process, have worked ourselves into another wedge - this time, bearish.
Things I don't know:
1. If we will see the sub-3300 level again in November -- this level has withstood multiple retests recently.
2. Which trend will ultimately prevail -- I suspect bullish but there are signs of the economic recovery slowing.
Things I do know:
1. We will almost certainly not retrace to former all-time highs before the election -- that would be excessive.
2. At some point, this counter-rally will stall out, and backslide a bit -- how far, only time will tell.
Personally, I think it would be healthy for the S&P to come down to its 200-day moving average around 315-320 in order to reset prior to another bull run towards new highs. However, it is perfectly possible that it may come down only a little and trade sideways election is decided.
Feedback welcomed and encouraged.