SPX closed the week with a 22.6 points gain (+1.74%). Friday trading action was quite interesting since SPX was close to begin a new bearish cycle but bulls stepped in the last ~2h.
Price action; the bigger picture seems to me a litle more bullish at the moment than the shorter time frame. Let me show you a daily and a weekly chart.
First, the daily chart. The rebound from 1290, at where SPX was quite over sold, was nice but there was not much of a follow through. I have high odds for more business on the down side.
Good news for the bulls is that the week closed in green and with a semi bullish candle. We could see rebound next week to 1350-ish which is also first resistance area.
Note also that we are trading below MA20 on the weekly chart.
Below SPY 1h and VIX 1h chart. SPY money flow slightly negative, VIX short term trend is also up and thus odds for more down is quite high.
However, as you can see on the 1h SPY chart, the bullish volume insertion (bull-bear-bull cycle) at the end of the week gives hopes for the bulls for at least range trading at the beginning of next week. My best guess though is that the bullish volume last week was only short covers but let’s see..
We need to be very open minded for the short term. I’ll update levels on monday morning. Right now I’m guessing on range trading next week.
GL and have a nice weekend!
