As we mentioned in last weekend's report: "Price action is bullish short term, bearish medium term and bearish long term. Another wide range week which ended without much change. 3850 support area was tested and bought.. however I am leaning toward Avi’s yellow count as having slightly better chances at the moment. Having said that, NAAIM sentiment data suggests we are VERY close on setting an important low on a timing basis - meaning days to maybe couple of weeks at the most.. The last time we had this type of Short and Intermediate timeframe buy on NAAIM was at the covid lows but even afterward, we had a 10% drawdown before the rally actually stuck.. a 10% drawdown from here puts us in the 3700 area. Bottom line is… time wise we are close.. price wise we can have some more downside toward 3700 maybe a little more.. And that can happen as early as the coming week.. So short term I expect some more bearishness.. Intermediate/Medium term I am bullish and would look to buy the next big low."
What actually happened is we had a weak week with us going deeper into the more bearish count as suggested last week.. before a late day rebound on Friday.
Looking ahead, price action is bullish short term, bearish medium term and bearish long term. It was a bearish week with us continuing the selloff after testing the supply/resistance zone near 4110 area on the Emini S&P 500 (ES). Price tested as low as 3800 before a late day rebound on Friday that was most likely OPEX related.
This bounce that started on Friday is likely to continue for one or two more days. We may pullback a little into the 3860 area first and then attempt toward the 3950 area and possibly as high as 4000. 3945 is strong resistance followed by 3965. I do not think we have seen THE low yet.. but we are close in time. In price terms, not very clear right now but my expectation is for us to continue the countertrend bounce for the early part of the coming week which then gets sold in the latter half of the week. I am still looking for lower toward the 3700 area but it is not as clear as it was last week. Same as last week, short term I expect some more bearishness after this current bounce is done…. But intermediate/medium term I am bullish and would look to buy the next big low.. Time wise, we are close… price wise i.e ‘how low’ is the big question.
Grey zone resistance at 3935-49 and then 3975-91. Support is at 3899-85 and then 3858-42.
For Monday, daily pivot is at 3886.5. Resistance R1 is at 3965 and R2 at 4028. Support S1 is at 3823 and S2 at 3744.5.
All the best to your trading week ahead.