If Mr Market is going to look down, this is probably the best place to do it!
On Sunday 3 May 2020 10.06pm, I emailed Clients my latest post titled 'If Mr Market is going to look down, this is probably the best place to do it'.
Below is the full transcript of my write up:
Dear Clients
A short update on S&P500 Index (SPX) & Straits Times Index (STI):
On 29 April (Wed), SPX closed at 2939, just 5 pts above my 'stretched' 61.8% Fib retracement target of 2934, before turning down hard on Friday with a 2.81% drop.
However, I must admit even with that drop, price still has not break down its short term (green) trend channel OR its Bollinger Bands (BB) midpoint. See attached charts.
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But if Mr Market is going to look down, this is probably the best place to do so because:
- 61.8% retracement levels are high probability strong road blocks for bear market rallies
- MACD is just about to do a dead cross (albeit above 0 line) &
- RSI is unable to go above 60 which is often a hallmark of bear market rallies.
So I'm going to be a bit more patient and wait out more price action to fill out to the downside.
Similarly for STI, it too held up so far in the upper BB segment but price action did not even try for the 50% Fibonacci retracement level at 2748 (vs SPX's 61.8% retracement).
As mentioned previously, the depth of the next pullback will tell us the state of Mr Market's near term condition so watch this space.
Live Long & Trade Well!
Thank you & rdgs
Thomas Ng, CMT
Principal Trading Representative
首席股票经纪
#plsreaddisclaimer #chartforillustrationonly #spx3may20 #sti3may20 #globalalignment3may20 #thedropihavebeenlookingfor #befluid #wytant #livelongandtradewell'