Stock Market Bulls Have Momentum – 10/21/22

The strong rally in US stocks on 10/21/22 added evidence that the bulls have momentum.   However,  an important resistance level  needs  to be exceeded for the uptrend to continue.

The daily S&P 500 (SPX) chart courtesy of Trading View updates  the action.

Daily SPX – RSI has now crossed above the 50% level  usually this is bullish and in this case implies at least several  more  trading days of upside action.

MACD  lines are rising, again implying  at least a short-term rally.

On the bearish side of the coin, SPX is near a powerful  resistance zone.

There’s chart resistance at SPX  3,806.91 – this is the 10/05/22 peak.  Also, a 100% retracement from the 10/13/22 bottom – a Fibonacci ratio of 1/1.

A  Fibonacci .236 retracement of the decline from 01/04/22 to 10/13/22 is at 3,804.76.

A Fibonacci .382 retracement of the decline  from the 08/16/22 top at 4325.28 to  10/13/22 is 3,810.05.

Three  Fibonacci points very close  together  represents a  potentially powerful resistance zone.  Such resistance usually requires  powerful  force to break through.  We could find  out if this resistance can be broken in the next  one or two trading days.     

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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