Will the S&P500 trend higher again?
In this video, we identify the major support level the price is reacting from and what we need to see in order to look for the price to rally.
Watch the video to learn more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we’re going to assess the S&P 500. I’m going to see whether it’s time to look for an opportunity here.
The price has been pulling back for a while now, and we’ve seen the price retest a couple of structures. The first area where the price is at 138.54. This is a nice low volume area on this rally to the upside.
Typically, in these low volume areas, we see the market try to rebound off these points, especially if the market deems this area as a place where it’s fair value. We should see the market climb back up to these previous structure highs.
However, we’ve seen a little bit of extension from that. This 3811 area is also a low volume area in this zone. It came to the other side of the value, rejected, and pushed back to the upside, suggesting that buyers are waiting around this area, here.
But, what makes us want to be a longer-term buyer into this market is that if we look at this and say that we want to be long around this area, we’d want to be long in that previous structure high too, which could take several days.
So, we need to be sure that the market is pressing back and in trend again. As we’ve discussed before, when the price is in an impulse on the retracement phase, we’ll see lower timeframes trending.
If we go to the four-hour, for instance, we know that the daily is pulling back here, and we can see that the market is making lower lows and lower highs.
To be a longer-term buyer of this, we need to see the market shift back and start trending higher, very much like what happened here. The pullback phase’s price consolidated, broke out, made a lower low, created a lower high, and continued to the downside. You can see here, on this little pullback, that the market breaks out, rallies up, consolidates, then breaks out.
The market at this point starts making higher highs. From that point, you wait for the higher low to come in, which is this point here, and then we trade that overall trend.
That’s what I’m looking for, quite similar to what happened, there.
The current highs are around the 1.39 area. If the price were to break that, it would be ideal to get long on a continuation into the previous structure highs. Or if the price comes up into 1.39, rejects it, comes back down into this 1.3854, where we could look for a potential inverse head and shoulders for a possible long position.
I like the opportunity here, and if you want to look for an earlier entry, we can go down to the 30-minute timeframe, here, and look for changes in cycles. You can already see here that the price has come all the way back up, retested that structure, and it’s currently heading back towards these previous lows, here. If this market finds support around this area, it would create an inverse head and shoulders, with the left shoulders here, head, and right shoulder coming in around 3845s.
If that occurs and the price breaks to the upside, we could look for a long short-term opportunity up into that 1.39 area.
Keep that in mind for the S&P. I think we could see a few longs coming back into play, but only if we get those changes in cycle that we’re looking for.
Thanks for watching this video update, and I’ll catch you in the next one.
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