Today I’m going to show you an SPX level that is a must-watch for the week ahead.
I’ll discuss bullish and bearish targets following this week’s inflation data, and the triggers for each.
I will also provide an update on the US Dollar Index (DXY).
Watch the video below and scroll down for the annotated charts and analysis.
The SPX (S&P 500) swept the 4,400 October highs on Friday.
It was an aggressive move following a relatively bearish close on Thursday.
However, it certainly wasn’t surprising considering the velocity of the November rally.
Now it’s time to find out if SPX bulls can hold above those October highs.
Last week, I told VIP members that I was watching for a sweep of the buy-side liquidity above the October highs and a 4,420 retest.
That was the first requirement to start watching for short opportunities.
I wasn’t expecting the sweep to happen on Friday and would’ve preferred a 4,420 wick this week to start looking for shorts.
Friday’s liquidity grab doesn’t invalidate the short idea, but it does mean I need to see more early this week to validate a short.
Specifically, I need to see a sustained break back below 4,395.
You can see how SPX is respecting that level on a daily and 4-hour closing basis today.
A sustained break below 4,395 could spark a run on sell-side liquidity.
There’s no shortage of that considering the aggressiveness of the November rally.
Nearly every day since October 30th has left behind an inefficiency that could become targets on a sustained break below 4,395.
Alternatively, consolidation above the 4,400 area this week could indicate bullish continuation toward 4,450 and potentially the September 15th candle at 4,500.
As of this writing, there is no confirmed setup, but we will be actively discussing things as they unfold in the Daily Price Action VIP group.
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