Well, sell in May did not materialize for the S&P 500 but the market continues to chugg higher. What is in store for us this month?
Let's take a look at the charts below. Each day I will try to analyze and put the analysis here. I will try to update it every day so do press the refresh button.
If we take a look at the daily chart of the S&P 500 above, we can observe that the S&P 500 has been able to overcome the powerful 200 day moving average.
This is a sign of strength and puts the S&P 500 in bullish territory from a long term perspective.
There is quite a lot of resistance on the left. I did not show a lot of the past data but if you check the daily chart on your own you will see the resistance there.
The red area I colored is also a resistance area.
I think the consolidation or sideways trading in May has helped to absorb quite a lot of resistance. As you can see from the chart above, the S&P 500 has broken out of the consolidation and is trying to move higher.
In my opinion I think if the S&P 500 is able to stay above 2900 and also the 200 MA, it will continue to move higher and may even meet the previous all time highs.
We have a bottoming tail formation last Friday and if the SPX can move above the highs of the bottoming tail today, then it might go higher.
The rising 20 MA and 50 MA also continues to tell us to have a bullish bias. So do continue to have a bullish bias.
Let's zoom in a have a look at the 2 hour chart of the SPX.
As you can see, the SPX has broken out of a significant resistance.
Resistance once overcome will become a new support. I have highlighted the important support area in green. Watch this carefully.
As long as SPX stays above this area and also 2900 then I think SPX will continue to climb higher.
There are 2 short trend lines that I have colored in blue.
If SPX can break above the downtrend line then SPX can move higher.
And if SPX continues to stay above the lower uptrend line, then SPX can move higher as well.
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In this week we will have a look at Bitcoin, ETN and MAT, SPX and QQQ and see what we can learn from its chart.
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