Wait n’ see

September 13, 20232 Comments

On Monday’s blog I noted that the 50 day SMA often acts as temporary support or resistance points. On that day, the SPX had been attempting to break above the 50, which was hovering around 4480. This, after having broke below the indicator in early September.  I noted in that blog that, should the SPX fail to break above the 50 (4480): “failure will indicate a potential lead to break the lower trendline (4400) and reach bigger technical support near 4200”. Today’s blog takes a quick look at the SPX and the TSX to determine what the neartermed potential moves might look like.

S&P 500

It would appear that the SXP attempted a marginal breakout on Monday after my blog was published. But that move was reversed yesterday. Lets take a look at the SPX chart now, and apply a few indicators. I’ll focus on the daily chart for neartermed analysis. Longer term, so long as the index remains over the 200 day SMA AND stays above the major support point of around 4200, we are in a secular bull market. I’m going to ignore MA’s for now, and focus on more sensitive indicators on a daily chart.

Below: The big red horizontal line is old resistance new support, around 4200. Note the purple minor horizontal support at around 4350, just above that big support level. The Bollinger band shows a recent test of the top band, and a retreat to the median line. This retreat to the median line coincides with a retreat to the median lines in stochastics and RSI – which is an area these indicators often find support. So, there’s some potential for the current level in the mid 4400’s maintaining for the remainder of the “danger zone” (last 2 weeks of September).

The most important thing I see in this chart is the old high of just under 4600 was not taken out in the early September peak (aka a lower low). Given the neutral readings on the indicators right now, its a 50/50 chance for markets to swing up or down. You really can’t make a case for raising more cash OR for buying stocks right now. In other words, hold the line.

 

S&P TSX 300 Composite

The daily TSX chart has the big red horizontal support/resistance lines on it. You’ll see how its been in a lovely sideways trading range. And y’all know how much I love sideways charts! So easy to trade! The neartermed trading system setup – with Bollinger’s and RSI/stochastic hooks has been very accurate. Buy indications are shown via green boxes, sell indications via purple circles. Right now the TSX is finding support at around 20,070, shown by my purple horizontal line. Like the SPX chart, momentum is showing neutral signs. So, again, it could swing either way. And again, hard to make a case for raising more cash OR for going back in. Hold the line.

 

Tell a friend

  • Spread the love: If you enjoy this blog and my analysis, please forward this one to them and encourage them to subscribe – click here to subscribe.
  • Educators: I regularly conduct “Introduction to technical analysis” lectures for business students enrolled in colleges and universities. It’s one of my give-backs to the community. If you are in Ontario, and have a group wishing to have me come out, let me know via the contact info below.
  • Win by not losing: You guys know I RARELY ever pitch ValueTrend on this blog. But – if you aren’t getting the results you want in your portfolio, you can contact us by phone or email – click here for that info. We’ll be happy to discuss your personal situation, and offer solutions in how we can help you limit your risk, and keep your money. This, while earning a respectable, reliable rate of return. Check our equity performance by clicking here. We are a family office looking after households with combined assets of $500k +.  We manage all types of traditional investment accounts (RRSP, RRIF, corporate, personal, trusts, etc).

 

 

2 Comments

    • We don’t use BB’s for formations because they are very whippy – more importantly– simply look at standard deviations off of a MA.
      However, if you read Monday’s blog, yes, you are correct in that the SPX is forming a symmetrical triangle in its price behavior.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Never miss another blog post!

Get the SmartBounce blog posts delivered directly to your inbox.

Topics

Topics

Recent Posts

Keith's On Demand Technical Analysis course is now available online

Scroll to Top