Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Why PEAK INFLATION is a RED HERRING! Prepare for a Decade Long Cost of Living Crisis - 9th Aug 22
FREETRADE Want to LEND My Shares to Short Sellers! - 8th Aug 22
Stock Market Unclosed Gap - 8th Aug 22
The End Game for Silver Shenanigans... - 8th Aug 22er
WARNING Corsair MP600 NVME2 M2 SSD Are Prone to Failure Can Prevent Systems From Booting - 8th Aug 22
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
WHY PEAK INFLATION RED HERRING - 5th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
SILVER’S BAD BREAK - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22
What it's like at a Stocks Bear Market Bottom - 29th July 22
How to lock in a Guaranteed 9.6% return from Uncle Sam With I Bonds - 29th July 22
All You Need to Know About the Increase in Building Insurance Premiums for Flats - 29th July 22
The Challenges on the Horizon for UK Landlords - 29th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Bears Losing The Battle

Stock-Markets / Stock Market 2021 Feb 05, 2021 - 10:57 PM GMT

By: Ricky_Wen

Stock-Markets

Monday's action retraced all losses from Friday as the Emini S&P 500 (ES) formed a double bottom during Sunday night at 3650 key level. The next two sessions will be pivotal in confirming whether it's risk on again or whether we need to wait a bit. Right now, bears are losing the battle before price action is back to neutral mode given the V-shape recovery into 61.8-78.6% retracement of the 3860s-3650s range.

The main takeaway is that this is healthy consolidation in the bigger picture because it allows the market to reset and take out some novices and shake the tree a bit. It clears out the newish traders that keep on buying calls and getting paid easily for the past few months. It ain’t gonna be as easy and simple as that going forward. At least not until price action confirms the stabilization/higher lows. During Sunday night, the market held the 3650s and formed a temporary double bottom setup. This was no surprise because we’ve been saying the 3650 area has been a key level for the past few weeks. It is the confluence of the January monthly lows.


What’s next?

Monday closed at 3763.75 in the ES as the low to high range since Sunday was +120 points or +2.95%. Bears are facing a V-shape recovery and extinction risk again. Feels like déjà vu so let’s see what happens here at 3800/3820 key resistances. Let the price action dictate your actions. Know your timeframes

Summarizing Our Game Plan:

Price is back to neutral mode and starting to turn bullish as short-term bearish momentum is failing and bears are facing another extinction risk given how price action has been reacting since the Sunday 3650s temp bottom…another V-shape recovery thus far.
Given the price action clues from Monday Feb 1st, the market has temporarily stabilized by a double bottom of the 3650 pre-determined key level. If you recall, it’s the Janurary monthly low and also our shit hits the fan level.
Market has retraced all of Friday Jan 29th losses and now looking to reclaim 3800 and 3820 to double confirm that the 3650s bottom is likely in and the train is back on its way towards 3976.
Reclaim = a daily closing print above 3800, followed by 3820. Could do it today or need a couple days more consolidation. Wait and see as bears will try their hardest to disallow the push above 3800 for today’s intraday.
If bulls fail this feat then price action is still stuck between the current range of 3820-3650 or the smaller range of 3800-3700 that we identified from yesterday’s report/charts.
Again, this is a day-by-day market now as price action remains below the trending daily 8/20EMA resistances so we gotta be nimble and adaptable with the adjusted volatility.
This is going to be a large rangebound market for the forseeable future, so treat as 3650-3820 bigger range and smaller range 3700-3800. Know your timeframes as this is being treated as a shakeout on the weekly chart before price action could confirm a stabilization event to move into new all time highs again (3900+).
Mainly watching 3800 key level this morning, if above it, opens up 3820 then 3830.
Below 3800, opens up a backtest into gap fill 3768 also known as Monday’s closing print area.
Both sides are tradable in this overall range as volatility creates many great opportunities.

See charts on Emini S&P 500 that accompany this article.

Ricky Wen is an analyst at ElliottWaveTrader.net, where he hosts the ES Trade Alerts premium subscription service.

© 2021 Copyright Ricky Wen - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in