S / R Levels - Feb 3 - 7
A mid-week bounce failed to materialize into a reversal. The [bearish] consolidation thesis is now confirmed, with price action trending downwards. Key levels are critical for confirmation.
This week's bearish objective of $6,029 for SPX, posted last Saturday, was very close to $6,040, the final price on Friday. This close proximity to the target price serves as a testament to the enduring value of support and resistance levels in trading analysis.
SPX is the core of the Weekly Compass, and the following lines are a segment (more information were provided) of the analysis posted last week in the premium section:
SPX [As of January 24th, posted last weekend]:
Setup: Consolidation (pullback) expected
Considering: Three gaps nearby acting as a magnet, Bollinger breached in the daily chart, and daily oscillators at or near overbought levels, the Stochastic crossover is imminent.
Potential bearish reversal target if the key level is breached: $6029.4 (Most expected)
The index and the market in general fell sharply on Monday followed by a bounce, however, the weekly central level $6,078 (always used as the thermometer to validate bullish or bearish reversals acted as resistance during all the week), rejected price on Tuesday and Thursday. Remember, price action has to be analyzed, and this morning that level was surpassed but with a shooting star, which is not the ideal 4H candle, hence my post on X at 2:20PM:
Today, the SPX closed again below the central level for the week, the setup is not very encouraging.
You can follow me on X clicking here
The analysis for semiconductors (SMH) has been open for everyone during the Saturday editions, so free subscribers can have a reference of the analysis for many more securities, the following is a segment of what was shared at the end of last week:
SMH
Setup: Bearish
Considering: Shooting stars have proven their worth anticipating bearish moves, one thing in favor of bulls is that price is not overbought relative to oscillators, but the clash with the higher Bollinger band builds on the bearish thesis.
SMH resembles the NVDA chart, with comparable tops, and that stock is also giving clues of a bearish reversal coming, the complete analysis for NVDA with levels and other indicators is in this publication.
The bearish verdict was correct, SMH fell -6.85% during the week, this time it bounced at $234 on Monday and Tuesday, before bouncing to $251 and falling back again. Both levels mentioned were for the month of January, and when price action starts moving between monthly levels the volatility is something to watch carefully.
The following information includes the Support and Resistance levels for the month of February and for the next week. Next Wednesday the special edition with Annual S/R levels will be out.
This publication covers 35 securities: SPX NDX DJI ES=F NQ=F SPY QQQ IWM DIA SMH TLT TQQQ SQQQ UPRO SPXS UDOW SDOW URTY SRTY NVDA META MSFT AMZN GOOG AAPL TSLA NFLX COST MSTR PLTR AMD GLD SLV BITCOIN and ETHEREUM. If you trade some of them, this publication is for you.
With the weekly S/R levels, the ones for SPY, QQQ, ES=F, and NQ=F are be explained. We are in a season when the most significant price action occurs in extended market hours.
For educational content about S/R Levels click here
WEEKLY LEVELS
SPY: Bearish Setup
Bearish continuation if price continues below this key level: