Stock Market Technical Analysis Blog
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In the market this morning we had a pivot complete into a bounce setup. Two weeks ago today we entered the S&P (SPY) short position and closed it today for a 4% account profit. We entered a small long position today upon the technicals I will be discussing momentarily and will be adding to the position on Monday if we have follow-thru in the market.
Looking at the charts:
- Chart 1: The red dot shows the entry on the short trade and the black dot shows the close of the position this morning.
- Chart 2: Shows a classic pair of EMA lines that are merging to a pivot with an upside bias.
- Chart 3: the weekly candles shows the S&P printed a weekly Reversal candle this afternoon.
- Chart 4: shows the S&P found support yesterday at the 50% Fibonacci level.
- Chart 5: shows the very precise 1 year up channel of the S&P with yesterday's low holding that line.
- Charts 6 & 7: are updated charts from my blog on July 25th where I discussed the key relationship between longside bond setups and stock market declines. Looking at those charts closely tonight, we have seen very little change in the bond price but a drop in the S&P from its top channel line to its lower. The setup on the bond chart is a large slow changing setup because they are very large EMAs but all investors have to be aware that this bond setup is positioned to lift if it has a sufficient catalyst which as seen in the chart historically causes sell downs in the stock market.
A lot of investors are concerned right now, not knowing where the point might be where they would look back and wish they had exited stocks. That lower trend line on the one year S&P channel is absolutely key. If we have a weekly bar close below that line, stocks could take a substantial decline. As long as we stay in the channel, the music will continue playing.
Trade well my friends
Alan
