After a Trump Tweet that send markets in a whirlwind, the market is able to rise back up. With announcement by Xi that China will maintain an open door policy, the markets have a relieve.
There is some interesting developments in the daily chart of the S&P 500. Currently it is still finding support at the rising 200 MA. That in itself is good. As long as the 200 MA holds, then the markets are likely to go higher in the mid term.
If you look carefully, the S&P 500 may also be forming a mini reverse head and shoulders pattern. This is usually a bottoming sign. With April and May usually closing higher and conducive for bulls, we want to have a bullish mindset as long as the pattern continues to follow through.
Also, try to be on the lookout for the break of the down trend line. Once S&P 500 goes back above it, then we have a more bullish case for the market.
As usual, my regular readers will know that it is important to start the day by looking at the red zone white zone of the SPY. Using the 5 min chart we can often determine what we should do for intraday setups.
Yesterday, SPY went back into the white zone and formed a 5 min ascending triangle setup that help to propel the market higher. Later through the day, it went back below the red zone and form a descending triangle which is the opposite of an ascending triangle to send the markets lower intraday for a day trade.
Today, with President Xi's bullish message for trade, the markets may well open in the white zone so if that happens we once again will be looking for longs.
I will also be looking at the 60 min chart of the S&P 500.
It looks like it is forming a big ascending triangle in the 60 min chart and if S&P 500 can break above the resistance area, then it is very likely that the market may go higher for the next few days.
Once it breaks out and as long as S&P stays above the top of the ascending triangle we have a bullish case for the market.
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