S / R Levels - Sep 23rd - 27th
This week, these levels proved invaluable for emotional discipline. Despite numerous bearish reversal signals before FOMC, selling without adhering to these levels would have been a costly mistake.
Staying disciplined and following these levels saved many from missing a rally
By Wednesday morning, there were a couple of serious reversal signals that indicated a potential top, one of them was the Put/Call Ratio, which was screaming a bounce from the extreme complacency level where it was, the SPX did fall that day but not even close to $5556, the central S/R level for the week that I use as a reference to confirm reversals.
What happened? Well, for paid subscribers who received a special note that morning: see the rapid and violent BOUNCE in this index after you received the update at the level of the yellow arrow. The bottom was correct.
Worth noting the divergence with price action.
There were two indicators shared, the second also reversed immediately, it is presented below. Beyond the securities’ charts I use breadth indicators and other contextual ratios to measure market health, a key index is diverging with the current rally. The top was also correct for that one.
Selling solely based on these two indicators would have been a rash decision, the warning about managing risk based on S/R levels was correct, even for me since $5556 was not even tested.
On the contrary, the bullish destination for a positive reaction was anticipated at $5705 during the last weekend, please check where the SPX danced during the last two days. That number was spot on.
Here is the second indicator updated, and of course the Support and Resistance levels for SPX, NDX, IWM, DJI, ES=F, NQ=F, NVDA, META, AAPL, TSLA, MSFT, AMZN, GOOG, GDX, Silver, Oil, Bitcoin, and Ethereum.
Last public note: In such a bullish week NVDA closed -2.6% below last week, and AAPL made it above the annual S/R level. Caution is guaranteed for the days ahead, also as studied in the special publications about Rate Cuts.
See the weekly and monthly levels, next week $5556 is irrelevant for SPX and managing risk using these updated lines has proven to be correct and disciplined.
The second Indicator that reversed drastically despite the rally on SPX: