The market last week sold off the last couple of days last week. A lot of people are trying to determine if this is a correction or a trend change. Also, if it is a correction, is this a good time to buy the correction?
Below is a weekly chart for the S&P mini-futures. A lot of people gauge the market based on this instrument. We are looking at the weekly chart first because we want to see what is going on long term. All the Ichimoku indicate we are bullish. However, price has now closed below the Tenkan Sen so we are entering a pullback. The pullback could be minor or it could be a major pullback that eventually may cause a trend reversal. At this time, we really can not determine what type of pull back it is going to be. Therefore, we are going to have to wait and see what happens.
Below is the daily chart for the @ES. For the daily chart, we have a lot of “confusion”. Everything was bullish at the beginning of last week. However, with the last couple of drastic negative days, the Ichimoku indicators are now turning bearish. The Chikou span has now turned weak bearish, Tenkan Sen is now equal to Kijun Sen, and the Kumo Future is getting thinner where it could possible turn bearish. There is a lot of conflict on the charts indicating we are in a consolidating mode at this time instead of a trend. Therefore, we have to wait for some clear signals before any trading occurs. Notice, how price has touched the top of the Kumo cloud and bounced off it. The Kumo cloud is not thick at all so the next couple of days should tell us a lot.
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