S&P 500 On Safe Grounds?

17 paź 2022

The S&P 500 is at a major point because it is currently being held up by the
200 simple moving average, which, if it fails as support, could see price freefall
forming a bear market.

Back in March 2020, price breached the 200 simple moving average, but its
time below this indicator was short-lived as we saw a quick return back above
the 200 smiple moving average.

This is why we don’t want to enter short positions as soon as price moves
below the 200 simple moving average. Instead, we wait for confirmation of
lower highs and lower lows on the daily timeframe to avoid getting caught
up in a fake breakout.

Last week’s candle on the weekly timeframe shows a long wick below the
candle. The sellers attempted to force price further down, but the buyers
took control and were able to keep price at support.

We now want to see the buyers give price the momentum it needs to
bounce from support and resume the uptrend. As this is a major level of
support, if price breaks down and forms a bearish trend, we will start
looking for shorting opportunities.

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