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Wednesday, April 25, 2012

SPX update

The big gap up this morning took us up through the down trend line.  However, as you can see in the 195 minute chart below we are still in the box.

The last two strong up days were followed by down moves.  It remains to be seen if it is going to be different this time or not.  Today is kind of hard to figure out what it means.  Check out the 30 min SPY chart.

SPY tested the upper and lower price of the first 30 min. bar, but could not stay outside in either direction.
The bulls won the day, but not in a convincing fashion.  Now check out the SPY daily chart.

The first thing to notice is today did enough to turn the price bar green.  If we get some follow through the
short term trend would be up.  However, the linear regression channel is pretty sharply down.  The bears could return and send the market back down.  Check out the volume bars.  In the green circled area the biggest bars are clearly green.  There were no red bars bigger then the biggest green bar and several green bars bigger then most of the red bars.  Now look at the pattern since mid Feb.  The red bars are clearly dominant, especially since April started.  The market has been under distribution for a while.  If this market is going to break out and move higher that pattern will have to change.  There was no sign of that today as the last green bar was small just like all the others recently.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.