Choppy, Corrective Move Higher
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The market is getting supply and selling off whenever we test the 3900+ area on the S&P 500 … and then getting bought near the 3700 area. I continue to think we are in some kind of choppy corrective move higher toward 4000+.
However, picking the correct trade location is critical in this type of environment. And we have to continue to be nimble in our entries and exits as we try to trade this move higher. I am expecting the market to turn down lower for new lows whenever this corrective move is done … but from where is the big question.
Looking at internals, things look better compared to earlier weeks. Some strength is showing up, but not really that much. Price action is neutral to bullish short term, neutral medium term and bearish long term.
Sentiment, on the other hand, is still showing up as bullish, which is not really that encouraging from a contrarian perspective. It's also quite surprising that it is this bullish considering the market action we have been seeing.
We will continue to take these hit and run trades as we have been doing and eke out small gains week over week … even as we wait for cleaner/clearer setups to show up so that we can take trades that last longer than a few days.
Grey zone resistance at 3796/3815 and then 3838-55. Support is at 3718-01 and then the 3658-32 area.
For Monday, daily pivot is at 3763. Resistance R1 is at 3815 and R2 at 3857.5. Support S1 is at 3720.5 and S2 at 3668.5.
