The SP500 declined after the Basic Material Sector was sold out. The rise in USD during the day also contributed to the depreciation of the index, and the turmoil in Argentina and Turkey, as well as growing uncertainty over world trade, are the ideal prerequisite for a short-term adjustment. Given the accumulation of negative stock market fundamentals, I expect a short-term correction to test the previous peak of the index at the end of January, before the collapse of the markets. Namely, the support area there is suitable for positioning with long positions on the trend.
Alternative Scenario: If the price goes under the Buy Zone and stays there in several consecutive day bars, the positive scenario will break and more likely to see a deeper adjustment.
Source: Bloomberg Finance L.P.
Graphs: Used with permission of Bloomberg Finance L.P.
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