Week 37 Market Roundup — Crash coming, more correction ahead or bull signs?

In my Week 36 market roundup, I mentioned anticipation of a rally in S&P 500 (and need to judge the character of the rally) since there was presence of demand on 4 Sep 2020. The rally came on 9 Sep instead of 8 Sep, which was a day late. Most importantly, the rally is of weak quality and there was no follow through to the upside on Thursday hence drifted lower on Friday.

Despite the weak rally up on 9 Sep 2020, the subsequent reaction on 10–11 Sep 2020 created a slightly higher low (compared to 9 Sep’s session), with slight decreasing of supply, suggested exhaustion of the down momentum. The series of the price action in S&P 500 is also reflected in the falling VIX. The bull has a chance to rally up to test the immediate resistance at 3425.

Is S&P 500 going to crash like what we witnessed during the COVID-19 sell off in March 2020? Judging at the supply level as highlighted in blue in the chart above, it doesn’t seem like it, yet. So far, it is similar to the correction in June 2020.

Are we going to see more correction and weakness ahead? The answer lies on judging the character of the possible rally the bull is having. So, how the price of S&P 500 behave in the trading range for now between 3300–3425 is crucial to determine if there will be a second leg down. If we…