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Technical Analysis

Correction Nearby: S&P 500 and Crude Oil

by Antonis Benis, on Apr 30, 2019 9:56:44 AM

S&P 500

The action since the late December major low in the S&P 500 produced a very powerful, momentum/liquidity driven rally, a slingshot move challenging the all-time highs and suggesting that a new bull market has started. The current advance should be just the first leg of this rally. However, cycles (see the first chart), inter-market analysis suggest that a pullback is nearby, i.e. probably next week. The expected correction should be short lived, 3-5 weeks until around early June (buying opportunity).

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S&P 500 trading signals

Gann Analysis: resistance at 3009/3014 and 3041/3050 (see the chart below)

S&P 500 trading signals

Demark indicators: daily TD sequential sell setup @6 and TD sell countdown @7 (as of yesterday 4/29)

Weekly TD sequential sell setup @9 +6

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Crude oil has a similar technical picture with the US stock indices, they tend to peak and bottom together. Its 10 year cycle suggests that a major bottom is already in place (December 24th) and should rally for the next couple of years; the current advance should be just the first leg of this rally. However, it looks highly likely that it has found significant resistance at an obvious Gann level: 66,51/66,64 last week (see the chart below) and produced a bearish weekly engulfing candle. Expect a short lived, rather shallow but still tradable, correction until late May/early June (buying opportunity also).

CRUDE OIL trading signals

Bottomline: Prices in US indices could still push a little bit higher, however upside is very limited (2-3%), a lasting breakout is not expected any time soon. Technical evidence of an imminent correction, not mayor crash, is quite strong to ignore.

Investors are advised to take some money off the table/ hedge their positions, do not chase this market; there will be better/lower prices ahead. Traders are advised to look for and take sell signals. Crude Oil must have reached a significant resistance, sell the rallies.

There will be updates once this expected correction in the US indices starts to unfold.


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Topic:Trading SignalsOnline Trading PlatformActive TradingInvestment StrategyCrude OilS&P 500
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About this blog is a personal finance blog. The articles posted provide relevant trading information, aspects, and opinions from expert professional traders and data and analytics providers.

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