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S&P 500 Weekly Doji

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SP:SPX   S&P 500 Index
The weekly S&P 500 chart shows a pattern that is similar to one seen in October of 2018 just before price lost -15% after a trendline break. Both instances saw price rising with bullish momentum-indicated by green price candles-and then a break of their uptrend support line. Both broke their uptrend support line with a significant weekly decline where price lost upward momentum and shifted to neutral, or no momentum, indicated by a gray weekly candle. The weekly candle that followed the shift to neutral in each breakdown was a doji with a long upper wick. The long upper wick indicates that traders attempted to buy the dip, but ultimately lost upward price conviction and closed the weekly price back near the weekly open, indicated by the small candle body. Doji’s are a sign of trader indecision and given the current virus outbreak, their indecision will likely lead to more selling.

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