$SPX for the week 7 May 2018

The bulls have shown their interest yet again.

So far when there has been a move into the lower green box, the 200 day is also in that zone, the bulls have clearly shown their hand by buying the weakness. The bear’s momentum is lost in this zone.

For shorter term traders and to the trained eye a very reliable pattern presents in this area. It is visible on the hourly chart as a failure pattern which leads to strength. (Vice versa if it happened on the topside). If this pattern happened on the daily chart I would trade it, as I do not look at the markets intra-day I would not have been at my screen to execute the trade after the setup which had been setting up since 3 May and confirmed on 4 May. (If you would like more info on this send me a message on any of the links below)

From here, even though the bulls are showing their interest, it needs to be followed with further momentum into the upper green box…and not fail. This is still a neutral zone. Of course there is opportunity to pick up individual stocks while the index is still in this neutral zone with a bullish bias, but the risks need to be understood upfront, which is a given.

Note the areas on the chart around the 200 MA and the failures, will the bears try again? At some point there will be follow through, by either, and the possibility of a trend resuming. With the compression in this range since the Jan high / Feb low, that time could be soon!

Hopefully the above helps you to further your trading. If you have any questions then please feel free to contact me on my FB page or email Miguel@TraderMig.com

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Good trading.

Miguel — TravelingTrendTrader

Email: Miguel@TraderMig.com

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