Always consider hidden risks
SP500 Index:  Dead Cat Bounce or... ?
August 26 ( From Tradeview )
If you would like to receive our free daily markets updates, please Sign-up

​​​​The Situation

We have been in one of the most Bullish Stock Market in history
​since 2009.​The Mighty SP500 Index from a low in March 2009
​of 666.79 to the closing peak on May 31 2015 at 2130.82 rose by
​a factor ​​of 3.27 spurred by low interest rates and strong buybacks
​from ​​US corporations.

​​​​With the Emerging Markets Financial Turmoil, the SP500 Index
broke its Rising Wedge Pattern on August 20 then at 2060.5.
​​( See chart Below - SP500 Daily - Red Trendline - Ellipse )

Since then we had two overnight gaps for the SP500 Index that
​have been done​​​:
- the first one between August 20  ( low of 2035.73​ )
​and the 21 ( high of 2025.09 )
​​- the second one between August 21  ( low of 1970.89​ )
​and the 22 ( high of 1965.15 )

Those gaps will become resistance and make the difference IF broken or not between a dead cat bounce or a real Bull Impulse... ​ So first test of the market wiill e the 1970 zone; a daily close higher will bring the next one to 2032 zone. A failed to do so will mean dead cat bounce is over...  ( See chart Below - SP500 Daily - Ellipses )

But the Real Interesting Technical Factor is that those gaps are within the Fibonacci retracement ( from the top on July 20 to the bottom on August 24) of 0.382 at 2032.5 and the 0.618 retracement at 1969.4.
​( See chart Below - SP500 Daily - Fibonacci - Ellipses )

 Louis Pasteur 
"Chance favors the prepared mind."

SP500 Index: Dead Cat Bounce or... ?  $SPY  #Trading #Investing #SP500 #stocks

SP500 Index​​ Daily ( Candles )
​SP500 20 day moving average  ( Yellow Line )
SP500 50 day moving average ( Red Line )​