S / R Levels Nov 25th - 29th
The market recovered the central level, closing the week in bullish mode
Support and resistance levels are crucial tools in technical analysis. They represent price levels where the market has historically struggled to move beyond. The indexes recovered the central level, ending the week in bullish mode.
Why are the S/R Levels important?
Identifying Potential Reversals: When a price breaks above a resistance level, it often signals a potential bullish reversal. Conversely, a break below a support level can indicate a bearish reversal.
Setting Stop-Loss Orders: Support and resistance levels can be used AS A REFERENCE to set appropriate stop-loss orders to limit potential losses according to each person’s risk tolerance (stop loss orders are not to be set exactly at a S/R level since fake moves can occur.
Confirming Trend Direction: A break above a resistance level can confirm an uptrend, while a break below a support level can confirm a downtrend.
Identifying Potential Entry and Exit Points: Support and resistance levels can be used to identify potential entry and exit points for trades.
How to Use Them with Technical Setups
Validation: If a technical setup aligns with a key support or resistance level, it can increase the confidence in the potential trade.
Invalidation: If the price breaks through a key support or resistance level, it can invalidate the technical setup and suggest a potential reversal.
By effectively using support and resistance levels, traders can improve their decision-making process and increase their chances of success.
Volatility Index
The VIX is a very important element for trading, this is the only indicator that inversely correlates with SPX, if you pay too much attention to the 10 Year note (TNX) or the U.S. Dollar Index (DXY) you may get confused. In the Weekly Compass the TNX is presented as an inverse indicator of another security.
That said, the VIX bounced well from the lower Bollinger band, and as any Bollinger bounce the 20DMA has to be watched, it acted as resistance and the latest candle is bearish, which means bullishness for the SPX.
The Stochastic crossover suggests the move has just started.
Before starting, let me share again the link for the latest fundamental analysis edition, Tesla, Ferrari and General Motors were analyzed.
S / R Levels
Every week the S/R levels are published, if you trade any of the following securities, this is an essential tool to validate or invalidate setups:
SPX, NDX, DJI, IWM, SPY, QQQ, TLT, ES=F, NQ=F, NVDA, META, AAPL, GOOG, TSLA, MSFT, AMZN, GDX, SILVER, BITCOIN and ETHEREUM.
Weekly S/R Levels: