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S&P500 (ES) Testing Weekly Chart Downchannel Resistance

S&P500 (ES) Testing Weekly Chart Downchannel Resistance

Posted January 27, 2023 at 6:34 am
Darren Chu
Tradable Patterns

S&P500 (ES) Testing Weekly Chart Downchannel Resistance

The S&P500 (ES) is consolidating after the strong reversal off the Wednesday Hammer low, hesitating as it bumps against downchannel resistance (on the weekly chart).  Although odds are elevated for a weekly close above this key bear-bull battle ground, a break above the weekly chart downchannel resistance could very well be brief with the highly anticipated FOMC and Fed rate announcement Wednesday potentially setting up for a slide back into the same downchannel.  Nevertheless, any higher January high versus the December high will reinforce the much higher January low versus the October low, greatly increasing the probability that the 2022 bear has ended.  The escalation in the Ukraine-Russia conflict deserves close monitoring.  Congratulations to paying subscribers who benefited from the Oct 18, 2022 analysis highlighting the early stages of a month plus Dead Cat Bounce, or from the February 18, 2020 analysis one day before the record high in the ES, warning of the pending slide in the S&P500.  The weekly and daily RSI and Stochastics are rallying or consolidating recent gains.  I am looking to enter short in the red zone (of the daily chart), targeting the green zone for Thursday.  The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter).  Click here for analysis on NASDAQ100, VIX

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Source: Interactive Brokers TWS

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