SPX: Pullback? Maybe. Reversal? No.

Hello traders and investors! Ok, so SPX did a new ATH today! This is incredible, right? Let’s see how to proceed from now on.

The black line was the ATH before Covid-19 crash. Today, SPX clearly traded above it, but the movement wasn’t strong enough, and now it found its previous support at the purple line (3370).

If this purple line doesn’t hold the fall this week, we’ll see a further pullback to the blue line at 3327, meaning SPX could drop around 1.3% in the next few days. But we must wait to see some confirmation, because it seems the support at the purple line is holding the price, for now.

But since the trend is still bullish, a pullback would just be opportunity to buy. There’s nothing indicating us that the trend is going to change.

Now, the daily chart:


Today’s candlestick is pretty bearish, right? A Bearish Engulfing with low volume. In fact, the volume is decreasing lately, just when we are near the ATH. Maybe this is an indicator that the market doesn’t find the current level interesting anymore, and we need to see a pullback to get more stocks at a cheaper price.

I never recommend to anyone to short an asset that is clearly in a bull trend, as the R/R ratio is almost never interesting. But when we are near resistances in a bull trend, I see just opportunity to book profits and wait for the next movement.

If you ask me, SPX could drop something around 3% and hit the zone of this pink line at 3280 and this would be ok. The trend would still be bullish, and we would have more opportunities to buy stocks for a cheaper price. And please, support this idea if you found it interesting! And you are invited to follow me for more analyses! I just write a few per day, so, I wont bug you too much.

Right now, I think is just the moment to manage positions. Not the right time to buy, neither to short. Yes, SPX could drop 3% in the next days, but we still don't have the confirmation of a pullback yet, so, be careful!

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