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SPX in unique chance to end extremely high next week

Last Friday was a significant trading day. At first, the stock market was falling on Friday morning making the recent breakout a false one. The market was returning back to the sideways channel.

Later during the day it recovered a bit, but still continued sideways. At 10:30 am the market started going up and created a new all-time high (ATH). See the Friday trading:

SPX Friday trading

If the market returned back to the channel, we could see the market to fall in coming days or weeks. It could be once again being range bound and it could fall back down to 2000 level.

It didn’t happen and the market has risen up to all time high making Friday a confirmation day:

SPX breakout

The chart above clearly shows the candle as a confirmation.

How do we determine whether it was a breakout confirmation or not? The body of a candle must close above the previous breakout candle. The breakout occurred on February 13 (see the chart above approx. 4 candles ago). The next day we had a confirmation candle, but it was somewhat weak to me. Friday was definitely a decisive confirmation.

Now, the channel’s resistance becomes a support and we may expect a new bull uptrend. There is nothing which could stop this market from going higher. How high and how steep grow will be is only determine by statistics and political or economic events which still may stop this market from going higher.

What do I expect from SPX this week?

I am bullish for the next week and expect SPX going up. However, Friday’s trading created a unique situation for this market. Because we saw a week low and week high to be the exact same as Friday’s low and high, now there is a great chance that the market ends up in either extreme high or extreme low which is statistically normally unlikely.

SPX expectations

In the upcoming week I plan on taking bullish trades, such as bull put spreads against SPX. I will determine the exact strikes upon tomorrow trading if it confirms my expectations for the trend direction.

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