Weekly Outlook & Review
Good afternoon folks,
The S&P 500 has ended yet another week green. It’s been the same process for the last few weeks - chop around at the beginning of the week, rally at the end. We hit 4600 on Friday, getting very close to the high of the year.
As I stated in last week’s post, 4600 would be the key level. We closed this week right at 4600 in a huge short squeeze:
Past this level, we are very close to breaking all-time highs. This is decision time. It will affect the market far into the future. A break of 4600 will trigger another 50-100 points and a failure to break 4600 will initiate a long-term pullback of 60-110 points.
Outlook for Next Week
I trade the S&P 500 index daily and use supply/demand levels as my main strategy. I focus on a handful of core setups within these levels (found here) which typically appear 1-3 times a day. I take one or two trades a day, targeting gains of 10-30 points. My objective is to maintain consistency and leverage it, rather than trying to get as many points as possible.
Next week will have climactic price action. Bulls are over-extended, bears are exhausted, and we’re running into major long-term resistance. Beyond this resistance, there aren’t many obstacles until all-time highs. I don’t expect clean price action, there’s probably more chop underway.
One possibility is that the market will reach a point of euphoria early next week right into strong resistance, which would create a strong sell setup and begin a long-term pullback. This depends on how the market reacts to 4600. Bulls want to see continued impulsive moves. They’ve already consolidated this week, so next week is the time to make a move higher. I can see it going 50-70 points higher next week if this is the case.
Bears want to see a momentum shift sometime this week, and a move back down to ~4560, which will initiate a deeper pullback to 4520.
Chart:
This is not a precise prediction, just a general outlook of where price action could go next.
That’s all for this week’s outlook. All of this will be updated and executed in real-time in The High-Roller Room (click here to get access). Stay sharp.
- T
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