Could be a good time to build a longer term SPX long

Potentially good reward:risk here for investors / longer timeframe swing traders or position traders


Last week was a big test for the SPX index - it tested two crucial supports

1) Retest of the 2022 highs
2) Retest of the major trendline which has held the trend for around 2.5 years now

It looks like buyers came in strong at support giving us a big bullish candle - likely forming a capitulation low.

Major pullbacks like these come only a few times a year - and if managed well can be good R:R trades.

For investors/position traders:
If the low from last week holds, any pullbacks into 5250 or lower seem like a good time to add - for a longer term hold for a few months or even a few quarters.

For traders wanting to see some clear momentum first:
The most important resistance up above is the 5600-5800 area & the 20w ema (which aligns with it currently). You might want wait for a clean reclaim of this resistance first. For investors, you could think of adding to your buys once this resistance is reclaimed strongly.

TLDR;

• SPX might have capitulated
  
• This is a decent area to start buying for a longer term hold - targeting the prior highs first and holding some into price discovery
  
• Invalidation: if a weekly candle closes below the recent low
  
• When to observe PA closely: test of the 5600-5800 resistance / 20w ema