Healthy Pullback Incoming? Analyzing Key Support & Indicators

TechnicalHunter
03-06

Market Pullback: Bounce or Break? Analyzing Key Support & Indicators

Price retraced as overbought technicals and price action signaled.

$S&P 500(.SPX)$ : Found support at the 10 day moving average. Shorter timeframes show a bullish candle at the close, offering some hope. See 4H circled. However, the daily oscillator suggests its downward move is just starting, aligning with the recent bearish crossover.

$NASDAQ(.IXIC)$ : Found support at the 20DMA, will this hold again? Oscillators suggest otherwise, given the bearish crossover. Positive factor is the low volume suggesting a lack of conviction in the current price action.

$Tesla Motors(TSLA)$ : Bearish oscillator but price action set a potential morning star at the lower Bollinger band, a technical bounce wouldn't be surprising.

$Cboe Volatility Index(VIX)$ : Looks bad for indexes, there is a bullish crossover and its level jumped with conviction. Possible tactical bounce tomorrow but there is room for further decline completing a healthy reset of technicals.

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Healthy Pullback Incoming? Decoding the Fear and Greed Index:

Historically, when the Fear and Greed Index reaches extreme greed (red arrows) and the price is overbought, a decline follows, as indicated by the black ovals.

Last time was in January: While many anticipated $4500 or even $4100, $4700, which I identified as strong support, held. The price closed just 18 points below my expected level. This pattern suggests a healthy pullback is likely, as the SP500 currently experiences higher highs during a sustained extreme greed level (similar to July 2023, highlighted by yellow circles).

Crash coming? No, and as I have mentioned since January, people waiting in the $4500 stop missed the bus long ago, also the ones waiting at $4600. $4900 to $4800 are reasonable levels to expect, unless $5110 is consolidated next week.

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# Market Tumbles: Pullback or Start of Reversal?

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  • Dr Rck
    ·03-08
    So the economy is in a healthy state? Really? And why there are more layoffs than ever before, especially with MNCs, and smaller companies raisng prices to keep up but inflation is dropping according to Fed plan; technically all seems good but systemic issues start to bubble up? A major pullback may be coming but too hard to tell..
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