Week of April 1st, 2024

SPX continues up in the wedge, sets new ATH again.

Mar 30, 2024

Hi everyone!

SPX yet again set a fresh ATH this past week hitting 5264. The recent price action has gotten to be very repetitive and as such has been very predictable. It has sold off a bit once it taps the top of the wedge and bounces strongly at the bottom of the wedge. We are nearing the point where one of these next tests will not hold and it will lead to a breakout and shift from this recent trend.

Last week I mentioned in our analysis of SPX:

Week of March 24th, 2024

Jovan Roche

March 23, 2024

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“5179 is the breakout origin and as long as it holds on dips the play continues to be long. A failed breakdown of 5179-5200 area would be the next spot to try long as I would not chase here directly at 5240. This long would target 5294 next.”

We started the week with a retest of 5200 area and got that failed breakdown i mentioned for a long to target 5294. We got to 5264 before a small pullback to close the week at 5254.

I will keep mentioning this because the risks are currently elevated: Crucial for the upcoming weeks: "Buy the Dip" (BTD) strategy remains viable as long as crucial support levels hold. However, if support crumbles, it triggers the initiation of a short trade, and this short position should be maintained until a resistance level is successfully reclaimed. This underscores the importance of adaptability. For those accustomed to habitually buying every dip, swift pivoting is essential when support levels start to erode. Failing to do so might result in surrendering hard-earned gains by persistently attempting to buy dips amidst a multi-day, multi-support downturn.

The 5179 fib extension is the important zone to watch for the upcoming week as it also happens to be the breakout origin on the move into 5260. Bulls are in control above 5179, bears take control if price starts to trade below 5179 (breakout failure). By take control - I mean the trend goes from buy the dips (bull) to short the rips (bear).

SPX Analysis:

Key Levels: 5179

Bullish Trajectory: 5179 is the breakout origin and as long as it holds on dips the play continues to be long. We already got the failed breakdown of this area last week so bulls will not want to revisit it again. As long as above 5235 can continue up into 5294.

Bear Trajectory: A breakdown of 5179 turns this into a failed breakout which could lead to a sell towards 5110 and 5056. If 5056 falls, then we start a sell leg to fill the gap at 4983 and head into 4800’s.

Summary:
BTD continues to be in play as long as above 5179. A fail of 5179 is the first warning to bulls that this rising wedge is about to break down.

IWM 0.00%↑
Last week I mentioned to importance of holding $200 and as you can see below (black line on chart at 200) that 200 was the low for the week and held before a bounce hard into 209. As long as 200 keeps holding we are continuing to stage a move into 216. If 200 falls then we could see a 2B top/rising wedge pattern that takes us back to 190.

QQQ 0.00%↑
QQQ remains in active breakout with 408 continuing to be the pivot spot of control. Above 408 there is plenty of upside room into 472 (measured move).

Last week I mentioned that as long as we were trading above 427, we would likely retest 449. We hit exactly 449 last two weeks. 449 is the next spot bulls need to take out to target 456 and 472. If we are unable to take out 449 and start to head lower, 427 likely will be tested.

I have shifted the POC from 408 to 427. Bulls in control above 427. However if 427 is lost it will create a short opportunity for a move to 408-411.

TRADE ALERTS:

For those of you not in the Discord (www.jr28trading.com) I highly encourage it as we cover a lot of the setups given here but we also alert LIVE trade ENTRIES and EXITS.