S&P 500 Analysis

S&P 500. As on Saturday 27 Feb 2021. CMP 3811.  Posted at 1:20 pm.

Bottom line : S&P is at an important long term resistance trendline, but the short term could still see upside to the 4100 level.


6 month chart : To understand price level, we take a birds eye view with a 6 month chart, i.e. EACH Candle is 6 months.  Notice how price is testing the upper channel line.  Is it going to fall immediately ? Probably not, but it is also unlikely to remain above this trend line for too long either.  So a large correction is coming.  The only question is whether sooner or later (it could even take several months to a couple of years to begin, or could start immediately).

--

2 month chart : Momentum has carried price nicely to above the trend channel.  It is unlikely to stay above in the intermediate term.

--

2 week chart : From the 2 week chart and lower, we start seeing the possibility of a few more weeks / months of sideways to upward price action.  This chart allows for price to reach the 4150 ~ 4200 level to test a shorter trend channel upper line that began in year 2009.

--

Weekly chart : As we move further lower to the weekly chart, we see an incomplete wave count that allows for sideways to higher movement.

--

 3 day chart : Drilling down further to the 3 day chart, we can see price is in a small wave 4 (of sub-minuette degree).  This time frame also provides us with a level where we know if we are wrong.  If price declines below 3549, the wave count would need to be re-evaluated. There is likely to be a fair amount of volatility as price completes smaller 4th and 5th waves.

--

Daily chart : This current correction is likely to end near the 4th wave of lower degree, about 3700 ~ 3750.  It does not look like a larger trend change at this time.

 

 

--

3 Day Moving Average Crossover : 10 EMA has remained above the 20 EMA since May 2020.  The intermediate trend remains up.

--

Ichimoku Daily chart : Price remains above the cloud on the daily. signalling it is premature to consider a trend change at this time.  Corrections remain short term buying opportunities.  But a change in larger trend is coming.