S&P 500 Index. Is it time to short?
On the weekly chart, there was a sideways movement from May 2022 to June 2023. It had a breakout with an upward trend (two impulses). The price returned to this sideways range six weeks ago. For the past four weeks, it has been hovering near the upper boundary of the sideways range, unable to close any weekly candles above it. There's a high probability that the price will test the lower boundary of the range at 3636. I made this note a week ago; it's time to update the forecast.
On the weekly chart, there are two seller candles on increased volume, which created a seller interest zone with the lower boundary at 4204.3. The most recent weekly candle closed within the historical weekly buyer interest zone with the upper boundary at 4141.8 (historical zones typically don't result in strong reversals). It is possible that the buyer will return from the zone and test the current seller’s zone with the lower border of 4204.3.
On the daily chart, the price broke below the lower boundary of the daily sideways range with increased volume. The lower boundary of the daily sideways range coincides with the lower boundary of the current seller interest zone on the weekly timeframe (4204.3), which the buyers haven't yet tested on the daily timeframe.
Pay attention to how the sellers closed the daily candle on October 26, 2023. They approached the historical buyer zone and waited for a buyer resurgence. On October 27, 2023, buyers attempted to make a comeback (as seen in the wick of the candle) from this historical weekly zone. However, sellers effortlessly prevailed over buyers on falling volume.
There was no buyer at the lower boundary of the daily sideways range, and currently, there is still no buyer.
Sales can be sought from the current seller's zone, including protection by the buyer at the level of 4204.3 or from the candle on 26.10.23. The target is 3696.2. The first obstacle for the short position might be the 50% of the latest weekly momentum.
As for buying, there's no context for it at the moment.
Good luck with your trading!
Disclaimer:
This case study is for educational purposes only and does not constitute investment advice or recommendations.
The trading or investment ideas presented here are for illustrative purposes only and are an integral part of a case study demonstrating the concepts of using volume to analyze or trade within the market scenarios discussed.
On the weekly chart, there are two seller candles on increased volume, which created a seller interest zone with the lower boundary at 4204.3. The most recent weekly candle closed within the historical weekly buyer interest zone with the upper boundary at 4141.8 (historical zones typically don't result in strong reversals). It is possible that the buyer will return from the zone and test the current seller’s zone with the lower border of 4204.3.
On the daily chart, the price broke below the lower boundary of the daily sideways range with increased volume. The lower boundary of the daily sideways range coincides with the lower boundary of the current seller interest zone on the weekly timeframe (4204.3), which the buyers haven't yet tested on the daily timeframe.
Pay attention to how the sellers closed the daily candle on October 26, 2023. They approached the historical buyer zone and waited for a buyer resurgence. On October 27, 2023, buyers attempted to make a comeback (as seen in the wick of the candle) from this historical weekly zone. However, sellers effortlessly prevailed over buyers on falling volume.
There was no buyer at the lower boundary of the daily sideways range, and currently, there is still no buyer.
Sales can be sought from the current seller's zone, including protection by the buyer at the level of 4204.3 or from the candle on 26.10.23. The target is 3696.2. The first obstacle for the short position might be the 50% of the latest weekly momentum.
As for buying, there's no context for it at the moment.
Good luck with your trading!
Disclaimer:
This case study is for educational purposes only and does not constitute investment advice or recommendations.
The trading or investment ideas presented here are for illustrative purposes only and are an integral part of a case study demonstrating the concepts of using volume to analyze or trade within the market scenarios discussed.
Good luck with your trading!
