SP500 shines back again
06 March 2023
The end of the previous week brought a significant shift in the global indices, with a strong sell signal transforming into a legitimate buy one in just two days.
On Thursday, the S&P 500 reached the long-term downtrend line and used it as proper support. On Friday, the price came back above the mid-term uptrend line, practically canceling the initial sell signal, which was created after the breakout of that support at the end of February. That breakout turned out to be a false one, creating a false breakout pattern (yellow), which is usually a strong signal in the opposite direction and promotes an upswing.
If the price manages to hold above the green uptrend line, we will have a proper signal to buy. A drop below this level would complicate the situation for the buyers. Although today's moves are not expected to be significant, the answer should definitely come this week. It's important to note that we have the NFP report coming out on Friday, which can be highly influential, especially on the indices.