Will the Gap Force a Reversal for the SPX?
Managing Expectations After a Two-Week Surge - Key Levels to Track
U.S. equities experienced another weekly rally. Major indices surged on Wednesday following news of a tentative two-week ceasefire between the United States and Iran, which also facilitated a partial reopening of the Strait of Hormuz. The The S&P 500 and Nasdaq Composite climbed 3.5% and 4.4% respectively during the week. Last week I highlighted the major relevance of $6,503 for the SPX, and despite intra-day volatility, the index managed to close abobe that level on Monday and Tuesday, and considering the weekly setup preceding price action, the bullish resolution was just consistent with the technical conditions.
With that level conquered, the high probability setups performed very well. Premium subscribers received last week the bullish targets and invalidation levels for: SPY, QQQ, AMD, NFLX, NVDA, AAPL, COST, META, AGVO, and MSFT; also with the bearish setup for XOM. All of them reached their targets, even Microsoft that reversed its move during the week. The success rate was 100%. Unlock the setups for next week, including the technical charts and the market overview, with the SPX as the core of this publication.
Premium subscribers have access to special analyses where I noted that a correction at this stage of the market was normal. I also highlighted why a transition into a bear market at this juncture would be highly unusual. However, considering many questions I received during the end of march, I outlined the worst case scenario for a decline. I always listen to your questions, and when I notice a recurring pattern, I address it through dedicated reports. Those special publications are a must-read for both traders and long-term investors:
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When you subscribe to the paid plan, you get special analysis that give north to our trading setups, the complete Market Intelligence Library is here, including educational content:
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In the crypto space, Bitcoin surged past our the key $69,7K level early in the week as risk appetite recovered, if you’re a Crypto enthusiast, today’s publication presents an essential setup.
Macro News to Consider
Economic indicators painted a mixed picture. The March Consumer Price Index met expectations, rising 0.9% for the month and 3.3% year over year. This headline figure was heavily influenced by a 10.9% monthly jump in energy prices, the sharpest increase since September 2005. Gasoline prices soared 21.2% for the month, pushing the national average above $4 a gallon. On a more constructive note, core CPI (which excludes volatile food and energy costs) came in slightly cooler than anticipated, rising 0.2% for the month and 2.6% annually. The labor market remained surprisingly firm, with March non-farm payrolls adding 178,000 jobs, far exceeding the forecast of 65,000. Last but not least, the University of Michigan’s sentiment index dropped 11% in April to 47.6. One-year inflation expectations also jumped to 4.8% from 3.8% in March.
Today’s Agenda
Technical Signals Vs Sentiment: Key level to watch next week for the SPX, completing the 28 years study posted last night with the levels.
The Momentum Map: Analyzing the opportunities in a single chart.
Setups Blueprint: Entry levels for short and long setups with price targets and invalidation levels for the SPX, U.S. Indices, Key ETFs, Magnificent 7, Crypto, and Megacaps.
Market Context: Analyses for SPX, VIX, NDX, DJI, Bitcoin, and Breadth
Deep Dive: Individual analysis of Metals and Mega Caps (20+ charts).
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Technical Signals vs. Sentiment
Considering the questions I received at the end of March, I’m keeping several bullish signals on the SPX, NDX, IWM, DJI, and Bitcoin charts that I posted when anticipating the bounce. It is essential to analyze technical events objectively, removing emotion from the equation, when you’re a real experienced trader you don’t panic, you manage risk and trust the process. My goal is to help you become a better investor and trader, markets will always face corrections, and you must remember which signals preceded the bounce in previous occurrences.
SPX: The Key Level to Watch Next Week