S&P 500 Index Chart Analysis

  • S&P started the week one leg down forming a long-tailed candle after Trump announced an unlimited QE programme. Upon seeing this, the eager bears will take it as an entry signal for a trade to the short side as the bar ended, not waiting for further confirmation as the market had already formed a new low.
  • In the rest of the week, the market saw a strong rally back despite the virus situation not having improved. This could be seen as profit taking by smart money, or a short squeeze to shake out weak bears, taking out their stops and triggering a violent push up.
  • The market seems to have reached a consolidation point and should once again start following the broader market sentiment which is bearish. Applying Elliot Wave theory, we have just completed the second push and should expect one last leg down before seeing a further correction back to the upside.

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