Point A
17th January 2023 – we have an upthrust testing the upper trendline of the trend channel. This is a sign of weakness and as I mentioned in last week’s analysis, we’re likely to test that resistance level.
Point B
18th January 2023 – Immediately following the upthrust we have a widespread down bar with it closing on the lows. The bar did test the resistance but failed miserably. Usually when a widespread down bar follows an upthrust, then the market will most likely continue lower. The S&P 500 is now coming to our support level at 3900.
Point C
19th January 2023 – The market tests the support level with the bar closing towards the middle of the range. This is at a significant level and we may not see follow-through as the volume on this day is lower than the volume from the previous two days.
Point D
20th January 2023 – We have a complete reversal of price with a widespread up bar with an increase in volume. Monday we should be retesting the upper trendline.
The bigger view of the S&P500 Daily Chart we can still see that it’s in a downtrend and it’s desperately attempting to break through the trend channel