Stock Market Technical Analysis
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Following up on last night's closing paragraph, I mentioned that the market would be vulnerable to any bad news across the wires and this morning we got hit good with the North Korea attack. Considerable damge was done to a number of charts, but just as many show to be holding at support.
In Chart #1 - The S&P daily bars trendline chart, we see that we dropped all the way from siting on the lower brown channel line last night to as far out of it as we fell last week.
Chart #2 - The VIX vilatility index, or fear indicator. we see that the VIX jumped well up into its blue channel after closing slightly below it last night. This move is a short term sell signal on the markets.
Chart #3 - The US Dollar Index ETF. we see the Dollar reversed dramatically giving a short term signal for the markets.
Chart #4 - The S&P two hour bars chart. We se that the S&P found support today at shadow channel that I drew in heavy black lines. This implies that the Bulls have not lost control yet. Since this channel caught the S&P I am holding off on transferring the VIX and the Dollar sel signals up tp the S&P chart as I normally do.
If the knee jerk reaction to Korea is done then this black channel shows the S&P is still trending up. If we lose this 5 week chanel then I will transfer them immediately.
Chart #5 - The SPY trading ETF for the S&P. One again this is the primary chart for the bear case tonight. We can clearly see the red 5 ema line is starting to push downward from the blue 21 ma line.
Chart #6 - The daily bars chart of the VIX. we see a complete reversal of the red 5 ema lines direction. It has done a "U" and turned back upward. Note however that if the market has an up day tomorow this line could easily get turned sideways underneath the green 10 line, a set up for a downward pushdown the next day possibly.
Chart #7 - The two hour candle chart of the S&P. We see that we hit intraday resistance at the light grey 150 ma line.
Chart #8 - The Daily candles chart of the S&P, shows that we slipped down through the light green 40 ma line briefly today but closed back up at it. This 40 line has been used 4 times out of the last 5 days for support.
Chart #9 - The weekly bars chart of the S&P shows that the dark green 10 ma line is still providing intraweek support for the S&P.
Chart #10 - The 30 min bars chart of the advance-decline indicator. We se that we are now sold down fairly deep down into the green buy area. Tomorrow favors being a bounce day because of that. This is another reason I am hesitant to transfer the VIX and Dollar sell signals up to the S&P on a knee jerk reaction to international news.
Chart #11 - The 30 min bars chart of the S&P shows the Bulls had to abandon the blue line channel and now are set to work the very slightly inclined thin red line channel.
Chart #12 - The 30 min bars ma chart of the S&P show a tiny symmetric triangle as a price pattern intraday. That pattern is a pivot point with no bias up or down.
Chart #13, 14, and 15 show very little change in the long term view of the major indexs.
Chart #16 - The finacials ETF took a big hit today, this is real ammo for the Bears.
Chart #17,18 and 19 show no visible change from last night.
Chart # 20 - The day bars chart of the S&P with 10 and 20 ema is still holding that parallel compression as of tonight. Tomorrows direction will heavily affect which direction this pivot point breaks .
Chart# 21 - The 2 hour bars chart of the S&P with 10/20 ema show the green 20 ema sent the red 10 ma line downward firmly today, but is now slightly overextended away from the red 10 line, implying some snapback potential tomorrow morning.
Overall the market has shown how quickly it will hit the sell button on bad news right now. Todays selling seems to be overdone though and we could easily bounce back up at the open considering the channel support held in chart #4 and the advance decline (7) is fairly deep down into the buy area now. Tomorrows Bull-Bear battle may very well be fought at the grey 150 line in chart #7.
Alan
