Will the 20 Weekly Average Hold the Market: Tech From Hero to Villain?
Lessons from 7 Overextensions in 60 Years - Analysis of What is Coming - Why NDX is a Market Spotlight + Key Levels to Watch. 20+ Charts to Navigate the Upcoming Week.
The previous edition anticipated the high likelihood for $5110 to be breached, considering a rapid move to $4970, which was the estimation for 20MA in SPX.
Both things happened, $5110 was lost and SPX visited rapidly 20MA, a scenario shared only with subscribers. Price closed the week at $4967.
Breadth indicators bounced, however the former heroes are now the villains, tech is dragging down the market, NVDA, AAPL and META lost crucial levels mentioned in this publication one week ago and TSLA fell as expected since the week opened below the minimal levels to consider a bounce.
I hope you used the S/R levels as a reference to manage risk, or considering the context, you managed your feelings and locked some profits.
What has happened during the last weeks?
Let’s remember the special analysis shared also to paid subscribers on March, considering overextensions relative to oscillators in the last 60 years:
Same as in previous occurrences, ROC anticipated well the risk creating a divergence with price in 2024 after a bearish crossover, RSI lasted 11 weeks above 70 and price action raised the bearish signal. Nowadays what is interesting is the pattern that followed those previous pullbacks from extreme overbought levels, there are no reasons to expect something different this time.
Trading is about consistency and that’s why I’ll be recalling previous analysis so you connect all the dots, read that analysis again and see the charts and conclusions based on what happened after the pullbacks from overbought levels.
Moving forward, what’s coming?
Consistent with last week the three key elements to watch remain the same, and there are two more to consider:
SP500 Chart