Bearish Price Action - Market Analysis for Mar 6th, 2022

In our report last weekend I noted:  "While the buying on Thursday and Friday was quite impressive, I do not think we have seen a lasting low in this market. I think we are now in a countertrend rally into the 4450/4550 area which fails and goes back lower to retest the lows and possibly lower. In the coming week, we are likely to have a pullback into the 4300/4250 area and if this can hold, we can begin another leg higher into the 4450+ area…. This possible pullback in the coming week can set up an Odds buy signal and if so, we will be looking to enter into long positions as planned… for a trade."

The market moved closely in line with that forecast, as after starting a decent move higher, we faced resistance in the 4400 area on the S&P 500 and sold off toward the 4300 support area again.

Looking ahead, price action is bearish to neutral short term, neutral medium term and neutral long term. Internals had a very brief period of strength to start off the week, but then began to weaken through the rest of the week. 

As of now, only the shortest timeframe internal indicator is holding a long signal. Everything else stays on sells. The Odds Indicator stays on a buy and is likely to remain that way for at least another week. NAAIM sentiment suggests we have more of a bounce higher ahead. Overall price action is bearish, but I still think we have more of short-term upside ahead into 4400+ before topping out and retesting the 2/24 lows and lower.

In terms of pivots and zones, grey zone resistance at 4325–40 and then 4386/4400. Support is at 4289-74 and then 4234-21.

For Monday, daily pivot is at 4325.5.  Resistance R1 is at 4369.5 and R2 at 4418.5. Support S1 is at 4276 and S2 at 4232.

All the best to your trading week ahead.

Princely Mathew hosts The Smart Money premium service at ElliottWaveTrader.