Line charts use closing prices, which are widely used for technical indicators, moving averages, and many large orders. Closing prices can also reduce intra-day price noise.<\/p>\n
By last Friday\u2019s close, the index was down 3.5% from its all-time closing high of $6978 on 27 January. The VIX rose to nearly 30, its highest level since the February\u2013April correction of about 20% last year.<\/p>\n
A prior update set 6780 as a key level, with a daily close below it implying a 60% chance the uptrend had ended. It said that if 6780 failed, 6575 would be the next level to watch.<\/p>\n
The index moved below 6780 on Wednesday 3 March and again on 5, 6, and 9 March, with a low of 6636. The earlier 6575 target missed by 0.9%.<\/p>\n
The decline from the 28 January all-time high of 7002 developed into a triple zigzag pattern. At the low, the index reached an estimated target of 6644 and then bottomed at 6636.<\/p>\n
The move is described as part of a three-wave decline within a larger \u201c4th wave\u201d correction. An outlined path depends on holding above 6636, with a potential high around late April and weakness into late September.<\/p>\n
The S&P 500 appears to have found a solid floor at the 6636 level on March 9th. We have since seen the strongest two-day rally in months, which suggests the complex and frustrating correction that began in late January is likely complete. This bounce from what we identify as the end of a corrective wave (W-a) sets the stage for the next move.<\/p>\n
This market strength is supported by last week’s economic data, which showed initial jobless claims unexpectedly falling to 209,000. A resilient labor market like this often provides the confidence for the market to look past short-term worries and resume an uptrend. The underlying economy appears strong enough to justify higher stock prices for now.<\/p>\n
For the next few weeks, derivative traders should consider bullish positions, as we anticipate a rally toward a new all-time high. This could involve buying call options with expiration dates in late April or May, or selling cash-secured puts with strike prices below the critical 6636 support level. Any daily close below 6636 would invalidate this bullish outlook and signal our final warning level has been breached.<\/p>\n
The extreme bearish sentiment we saw, with the VIX spiking near 30 despite a relatively shallow pullback, has quickly evaporated. The VIX has now settled back down to around 18, indicating that the panic has subsided and a more stable environment for an upward trend is in place. This decline in implied volatility also makes buying options more affordable.<\/p>\n
However, this expected rally to a new high, likely around the late April turn date window, is probably a B-wave within a larger “irregular flat” correction. We have seen this pattern before in this bull market, such as during the 2019 advance, which saw a new high before a more significant period of weakness. Therefore, the coming strength should be viewed as a temporary phase.<\/p>\n
Traders should be prepared to pivot from bullish to bearish strategies as we approach that late April target zone of 7120-7190. This means planning to take profits on long positions and potentially initiating new ones, like buying puts dated for the late summer. This will position traders for the expected C-wave decline that we anticipate will last until late September.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Closing prices guide key levels: index fell 3.5%, broke 6780, bottomed 6636; correction may persist.<\/p>\n","protected":false},"author":103,"featured_media":16985,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-51164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=51164"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51164\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16985"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=51164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=51164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=51164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}