The S&P 500 recently showcased a significant technical setup ahead of the U.S. interest rate announcement. An hourly converging triangle pattern formed but failed to break upward, signaling indecision in the market. Following the announcement, the index experienced a sharp decline of over 3%, reflecting heightened volatility.
On the weekly timeframe, the AB=CD harmonic pattern has taken control, marking the conclusion of the dramatic upward rally seen in recent months. The completion of the CD leg aligned with a critical resistance level, triggering a strong downward move. This highlights the influence of harmonic patterns in capping bullish momentum and emphasizing potential reversal zones.
This sharp decline raises the question: is it merely a "weak hands" shakeout ahead of the January effect, or does it signal a more significant trend reversal? The answer requires close monitoring and waiting for additional patterns to emerge, allowing traders to make a more informed decision about the index's short-term direction.
Attached are two charts:
- An hourly chart showing the unbroken converging triangle.
- A weekly chart illustrating the AB=CD harmonic pattern and the sharp decline originating from the completion point of the CD leg.
Disclaimer: The reader is solely responsible for any actions taken based on the information presented here. This analysis is for informational purposes only and does not constitute financial advice.
No comments:
Post a Comment