#SPX = Weekly Update = 23.10.2021 $SPY #investing $SPX #trading #ES_F #DowJones $NDX

There were a few strong signals from candles on Friday. While there was no clear signal to sell, there is a possibility that it could happen on Monday. Let’s analyze the weekly and daily and the perspectives for the monthly candles for major US indices.

CANDLES

Daily (chart above)
SPX formed a bearish Harami Cross and flipped the odds bearish. If index closes on Monday below the cross, this would be a major bearish event, followed by a decline. We will discuss the possible targets in the EW section below.
In order to continue the rally, SPX must close above the cross.
NDX formed a combo that could be viewed as a consolidation or a beginning of a downtrend. The odds are neutral and the next few days will bring the answer.
DJIA formed a green candle with unusually large wicks. The candle could be a Spinning Top or a bullish continuation.

Weekly


SPX and DJIA formed Three White Soldiers. The formation suggests that the trend upwards continues. The only little concern is the declining volume week-over-week.
NDX weekly is the most interesting one. It closed just 5 points below the large red candle. From candles theory perspective, the odds remain bearish and there is a good chance the next week will be red. The volume and a few other indicators would support this idea as well.
I already posted that several major market players also closed the week with bearish candles. FB was probably the worst. If the behemoths in NDX are not joining the rally, I am not convinced that SPX and DJIA would continue on their own.

The next week would be very critical for the long term perspectives as the monthly candles will be formed on Friday. As September candles were bearish, a lot of effort would be required to cancel them. The prices are close to make this happen. Let’s see whether they can hold for one more week.

Elliott Waves

SPX hit the target rectangle and is expected to retrace. The length of the retrace would be critical for determining the next move.


I am tracking two major counts.
Red (bullish):
Retrace to $4500-4450, an inflection area, followed by a rally towards $4650-4800.

Blue (bearish):
If SPX retraces lower than $4450, there is chance that it can go as low as $4320-4260.

Summary:
The beginning of the next week would be critical for forming the daily candles and confirming/rejecting a reversal.
If SPX closes a day:
– above $4560, the rally continues;
– below $4520, the reversal confirmed;
– any price between, the decision is postponed, but the odds remain bearish.

A monthly closure on October 29 above $4545.85 would mean a strong rally expected. Any closure below – November will likely be red.

Good luck!

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