The US index S&P 500 had been choppy during the August month. We could not really deduce a certain direction on the indice. To analyze it further, we will look into the daily timeframe.

- Market structure: Market structure on SP 500 is bullish. Market currently rests on the support level of 4370 and is forming a pinbar. We may see a rejection here but given that the bearish force is strong at this level, there is a high probability of this break and continuing down. At the level of 4280, we see a strong support where we will take a long position. SP 500 is forming HH’s and HL’s all together.

- Trendline: There are two trendlines in play on SP 500. We can consider both these trendlines as forming an ascending trendline. The resistance trendline is the upper channel and the support trendline is the lower channel. Market tapped the resistance channel and rejected it, inducing a selling pressure. The support trendline, is anticipated to be tapped at the support level of 4280.

- Retracement: The golden retracement level of 75-78.6% aligns with the support and is at a price point of 4280. This will be a high confluence region for the SP 500 to go long.

- EMA's: Both the EMA’s are bullish at the moment. The market is retesting the EMA 50 at the current level, being rejected by a pinbar. The EMA 200 is far below the current market prices and we may see EMA 200 converge at the support area as a confluence with other factors.

- RSI/CCI: Both oscillators are in their bearish region with RSI at 44 and CCI at -119. At this point, there is no clear direction on the oscillators other than both being bearish. If market continues to decline towards the support level, we might see extended over-sold region form where market could push back up.

The month of August has overall been a roller coaster for indices. With the political advancements worldwide, the markets have moved with uncertainty. With all the current situation, we have to wait for things to calm down so we take a low risk position.

S&P 500 longs from $4280

Aug 19 2021

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