Is Today Signaling a Pending Move Higher for the Stock Market?

Tom Gentile

Posted in
Technical Analysis

By: Tom Gentile
March 24th, 2023

2 mins read

There has been quite a bit of information written and spoken about regarding the volatility in the markets this week as a result of the outlook on the economy and whether we will go in to a recession / if we are already in one / and if we are in one when what it will take to avoid one or at least experience a soft landing / mild recession.

You can see by the amount of / characters in the writing there are a varying amount of opinions about what is going on right now.

What is going to be emphasized in this article is a couple of different scenarios the markets may go through if buying steps back in to the stock market to cause prices to move higher.

Today the equities markets are trading higher and if they remain do the last hour of trade this would constitute a bullish reversal day.

This may portend and end of the recent sell-off for the which may bring some carry over in to next week.

Figure 1: 100-day Japanese Candlestick Chart SPY Scenario 1
Figure 1: 100-day Japanese Candlestick Chart SPY Scenario 1

The blue arrow is indicating what may be the first scenario that plays out in that prices rally higher from here/today’s bullish price action.

Figure 2: 100-day Japanese Candlestick Chart SPY Scenario 2
Figure 2: 100-day Japanese Candlestick Chart SPY Scenario 2

Figure 2 above is what could be a different scenario that still ends up seeing price action higher for the SPY (what represents US equities), but not without puling back in price a bit lower (first blue, down arrow) before it then rallies higher, (second blue, up arrow).

Of course, we won’t know until trading resumes next week, but if you see either of these patterns playing out and lean bullish with your sentiment then maybe a look at the Morning Reports Lists to find call option activity is a starting point for your options trading research.

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