What a day! One news, one decision and markets go up strong in matter of minutes. Bad day for short holders. So what is the situation right now on sp500? Do we have strong moves up ahead? Should we just buy in correction and don’t look back? I’m not so sure about that. The truth is that Fed and other central banks decision may affect strongly markets in next days. So yes, chances are that SP500 will raise more. It is important to look at broader perspective.
Of course many people can see different formation, but in my opinion there is still forming a giant triangle (green lines). Sp500 did not break bellow lower line of triangle (near 1100 points) and now we have a strong bounce, which may reach even the top of triangle.
Inside we have more line of resistance and support (pink). They are more visible at lower time frame.
So as you can see from this chart, the way up won’t be that easy. Especially around 1300 pints there is a strong resistance (from previous formation of head and shoulders.
I would wait with placing short orders. For now stock markets, euro and commodities are going up and no one can tell how long it is going to last.
My plan for next days is to watch market closely and wait for correction at lower time frame – 5 to 30 minutes. I plan to take short term trades, because I am to afraid to take bigger long position on longer time frame with all that resistance ahead. When situation will calm down, I’m sure there will be some good setups which I can share with you! For now just remember about capital preservation! It’s important to earn but more important to stay in the game.
Oh, take a look at WTI oil. Breaking above 100$ – again. For now oil stopped at 1.18 extension after previous move to 61.8% retracement.
On longer time frame it doesn’t look so good – unless you are heavy long on oil of course. On daily we can see how the last correction ended on 200 SMA and near 61.8% retracement. Now oil is fighting his way back to top above 103$, and what later? Even higher? It is worth to watch oil closely, also on lower time frame because there may be some good setups.