SP500 is standard & poor 500, which comprises of the index of 500 companies listed on the stock exchange.

Indices are either swing trades or long term investments. For swing trades, we will analyze H4.

- Market structure: Market structure of SP 500 is super bullish on all time frames. H4 is tapping its previous high from where we anticipate a corrective move towards $4320. Buying right now at the resistance is risky and we may face drawdown. Therefore, we need to patiently wait for the market to come to our level so we position ourselves in buys.

- Trendline: Earlier, a descending trendline, also known as trendline breakout buys, had taken place on the pair. The validation of candles opening and closing above the trendline has been verified as well. Secondly, the ascending trendline was simply tested by the market, unable to break it. Till we see a breakout sell of a trendline, we will continue looking for buys. At the mentioned support level, there is no trendline confirmation.

- Retracement: The retracement level of 75-78.6% is in confluence with the support level of the swing, where we plan our long position. This region is at 4320-4330

- EMA's: Both EMA’s are below the current market prices, reflecting a bullish bias on SP500. At the support level of $4320, we may have an additional confirmation for EMA 200 being retested after the break. Both EMA’s have not been tested after the breakout.

- RSI/CCI: RSI is at 69 level and CCI at 100 level respectively. RSI is 6 levels below its over bought region of 75. CCI still has room towards 150 to enter its over bought zone. After entering the over bought zone, SP500 may neutralize its bullish pressure, hence forming a bearish corrective leg. At the support level, we will see what the oscillators present.

SP500 has two confirmations: support level and retracement level. Usually, indices react strongly on confluence levels of support and retracement. We will be placing our positions based on the analogy of the trend and strong reaction at the support. We will not be engaging in shorting SP500 anytime soon.

SP 500 waiting for the pullback

Jul 23 2021

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