The stock markets have dropped significantly over the past few days, but will this momentum continue, or will they recover?
We’re going to take a look at the stock market and see if it will recover or if the downside continues.
There was a huge drop in the market for the past few days. We already talked about this because the stock market has been rallying for some time.
The market recovered ever since it dropped when the pandemic started. However, there could be further downsides as uncertainty over the pandemic continues. But as of now, the markets continue to move higher.
After its current retracement, we could see another bounce and recovery in the stock market. This is because in a long uptrend, we usually see a couple of weeks of pullback, then another rally when we reach a weekly support level. Ever since the price broke the recent structure highs, it rallied, went down, retested, then continued to bounce to the upside.
We had a long move, a bit of a pullback, and a retracement. The price then went to previous structure areas, recovered, then bounced to the upside. Again, we had a nice pullback, a rally, then a continuation of the rebound from the lows.
Now, we’re in the structure zone where the weekly found some resistance before breaking through. I’m looking to see if the pullback will be a catalyst for a bigger move up.
The trend on the weekly timeframe is up and the price has recently retested the previous weekly highs where buyers stepped back in. If the price breaks below the trendline, then a long-term downward move could be set up. But until that happens, we should remain bullish.
The price has been bouncing from the trendline support recently. Are we going to see another bounce in this area, or will it break the trend?
I think we’re going to see some recovery in the market. Even if it’s only short term, we could see prices go back down. The previous structure lows are on a short-term recovery before we see either a downside or a continuation back to the all-time highs.
We would want to see a change in trend in the four-hour timeframe, which we don’t have right now.
I was expecting a bounce, a higher low, then a move up to the structure point. We don’t have that yet, but the price is doing something interesting on a lower timeframe.
If the price on the four-hour timeframe forms a higher low, we can look for short-term long opportunities back to the previous swing lows.
We could see this recovery today because there is an hourly-changing trend. But I would still look for a higher low. If we can get a higher low established on a four-hour timeframe, we could look for a continuation trade.
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