After S&P has broken the medium-term trend on Thursday last week and closed with a large red candle, the next day traders were pushing the index up and down without much apparent direction. Sellers are setting pressure on the price and if they control the levels marked on the chart $1.937, and then $1.949-56 resistance zone, then we will see the bottom below $1.916. The long-awaited correction may continue to the more impressive support levels of $1.894, then $1.853, where the 200 EMA is, which controls this macro-trend for entire 2013-14 years.
During the pullback, when we still are in a macro-trend, we need to look for some strong shares to counter the bears and restore the trend faster than others when the market finds the support. We can take Apple shares as an example. They showed us a relative strength on Friday, the price opened at the bottom, but closed above the previous bottom of $95.33. Now the key support is $95.33, then — $94.90. In a scenario with the rebound of the market, if the price resumes 8 EMA $96.62-.74, then it can reach $99-$100.
Unlike Apple, Amazon shares look very weak after a poor quarterly report. Price opened with a large gap down, there were a few days off to absorb a large movement and then two days of continuation. This tactic, including this precise share, I’ve mentioned in my last webinar on July 30. Now I'll wait for the pullback to receive trading opportunities for a Put. $304.59 Friday's bottom short-term support, the medium-term goal of $284.
Meanwhile, the market reached 100 EMA, Facebook shares are traded above 21 EMA, grown due to the positive quarterly report. The potential support lies at 21 EMA $70.30. An additional buying signal might be a trend line penetration.
General Electric strayed from the important level of $24.90-$25.00, formed a reversal candle and closed near the top. It can be expected to continue for another day and a half, before the next resistance of $25.59, large resistance area of $25.90-$26.12.
USD/CAD currency pair reached a major resistance area after breaking the downtrend with a large green candle, which was closed at the top. Now it builds a flag near the top, the longer it lasts the price, the greater the chance for breaking this level. But in a short-term period, you can look for Put trading opportunities. Before the breakthrough we may see a pullback to 8 EMA, which is at 1.0865.