S&P 500 Jan 24th to 28th Outlook
Recap of Last Week
Topped at the yellow zone and sold off. Downside target where the obvious gap zone is was tagged and in turn produced a powerful squeeze on the shorts who are not aware that the gap was strategically positions at the midpoint of prior week. An attempt was made to tag prior week close from below and failed. At the end of the week, ES settled at the midpoint.
Next Week Outlook
As mentioned last week, there are 2 conditions that will signal the end of the current up move. One condition is fulfilled (i.e. sold off to prior week midpoint) but the other one is not (i.e. close below that midpoint). Thus the fight is not over yet.
There is no change to the zones this week. If the market holds up well at the previous week close, a retest of previous week high (yellow zone) is in play.
The more interesting setup, however, is that ES selloff quickly below the red zone early in the week, and that the red zone acts as resistance. If that happens, it is likely the week will turn into trend sell week and close at the low of the week.