S&P500 had hit our target profit area according to the analysis published on 12th July and went way beyond our targeted destination. Currently the market is trading around our EMA200 while breaking it on the downside but no fractal confirmation yet. It’s a rough start to the week for markets. Stocks sold off in Asia and Europe, and Dow industrials futures tumbled more than 300 points setting the tone for a turbulent day ahead. Blame rising COVID-19 cases globally, and the spread of the more infectious delta variant of coronavirus. 

Daily U.S. COVID-19 cases are approaching the 30,000 mark, but there is a risk that infections could go parabolic with the spread of the delta variant, and rise to around 100,000.

The delta variant could create panic, because markets and investors typically focus on case counts as opposed to hospitalizations, Lee said — and as many as 82 million Americans remain unvaccinated or without COVID-19 antibodies. However, hospitalizations remain low. 

So while there’s little reason to be hugely bearish — because bond spreads indicate wider stability for stocks, and volatility measures are not signalling broader weakness — this “vicious” risk-off correction creates opportunities.

S&P500 on the daily chart is trading near EMA50 which might became a point of its retracement along with the strong price action support at 4270. In case we get a bearish impulsive candle below this level, itll trigger a further dovish move towards 4217. We will wait for a bullish candle closing above the daily EMA50 and then execute our bullish entries but the possibilities of a further dip suggests to wait for a while. 

S&P500 D1

Jul 19 2021