Rally Stalls Amid Resistance and Trade Tensions

SmartReversals
05-11

After a multi-week rally, the week concluded with indecision, a common characteristic of bounces.

However, concerns persist regarding key resistance levels reached by the $NASDAQ 100(NDX)$ , such as the 200-day moving average, especially with ongoing trade tensions, and when the U.S. president said “buy stocks” on Thursday, the market did not react as on April 9th; similar case on Friday when the green action in the futures vanished during market hours.

Seven consecutive indecision daily candles on the $S&P 500(.SPX)$ is an unusual occurrence, most of them have been dojis, and indicating an extended period of indecision and balance between buying and selling forces. In the context of a potential squeeze, this pattern could suggest a market coiled and ready for a significant move once a catalyst breaks the equilibrium.

The Magnificent 7 weigh more than 50% of the Nasdaq 100, and more than 30% of the S&P 500.

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