3 things to watch in the markets this week
three things that could help the bull case
After showing a strong start to the year and reaching a new all time high on January 4, 2022 the $SPX SP 500 index has been in free fall selling off as much as -12.36% at one point.
These dips are sometimes early indicators of more damage to come, and sometimes they turn out to be great chances to buy the dip.
How will we know what message its sending this time?
Here's three things that could help the bull case.
1. $SPX SP 500 to stay above 4278
The SP 500 traded at a low of 4278.94 on October 4, 2021 before bullish demand took over and sent prices higher. This price could prove to be a meaningful level. Watch for it to act as support. After dipping below this level for a while on Monday of last week it quickly got back above. Now task #1 is to stay above.
2. $SPX SP 500 to retake the 200 day simple moving average
Price has been below the rising 200 day simple moving average since last week as well. Bu the rising line indicates that the longer term uptrend is still intact. Price closed right at 200sma Friday. A move that gets back above, and stays above the 200sma will add to the bullish case.
3. $VIX index to keep dropping
Volatility that is declining from a recent spike can lead to buying opportunities. That is the current situation as the $VIX popped to 38.93 recently before backing off. What the bulls want to see here is a continued decline back towards the 20 level.
If all three of these things occur watch for more bullish price action to follow. But as always, control your risk, set your stops, and size your positions well.
***This is NOT financial or trading advice of any sort. NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.