Dip Buy or Bigger Pullback? 📈 📉
We hit a high of 6764 last week and have pulled back near 6550 (200pts+) due to Trump’s tariff tantrum with China. The markets have been extremely volatile the last 2 sessions with $SPX gapping down today and getting bought right back up. Let’s dive into a few scenarios for the end of the year
Scenario #1: Rip to 7150 Year End
$S&P 500(.SPX)$ ends up breaking back above 6700 and consolidates between 6720-6770. We then break 6770 and push towards 7000 the next couple of weeks. Many people go short and we end up retesting 6900 but dips get bought up fast pushing us to end the year at 7150.
Scenario #2: Dip to Rip
SPX end ups dipping back to 6600 and we end up forming a base there. We continue to form higher lows which then send us back above 6700. We consolidate under all time highs before breaking 6770 and pushing us to 7000 next. Market continues to be extremely resilient
Scenario #3: Big Dip into Rally
SPX ends up losing 6550 and we start seeing massive drops in the market. We test 6334 and fail causing us to drop back to previous ATH’s at 6150. We end up holding the previous ATH’s of 6150 and rally back to 6500 by year end!
As of today, markets are still trading indecisive. If we lose the lows that we printed this week then scenario #3 could definitely occur. The risk to reward for scenario #3 is the most favorable as it would provide a clean entry for many people on the sidelines!
Not Financial Advice, Just My Opinion!
Financial chart displaying SPX candlestick patterns from July 4 2024 with yellow horizontal support lines at levels like 6764 6550 6334 and 6150 blue arrows indicating price movements and a purple highlighted area around recent trading activity
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