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Wednesday, April 8, 2020

Update 4/8

Yesterday's weakness was met with buyers this morning.

There was another tick accumulation signal today.  So far 3 distribution and 3 accumulation signals on this rally.  The blue line is the next gap to fill assuming the market continues higher.  The red lines mark important lows from 2019 and could be an area with some overhead resistance.  The higher red line is the most important one.

SPX has run into the bottom of the Keltner 50 channel which often provides a pause or pullback in a situation like this.

The futures closed above the 100 SMA.  They stopped in the area of the prior high.  They need to confirm a break of that MA with a higher close.  At the moment this is a poke through and this line sometimes is fairly stiff resistance.  The futures held above the prior rally highs confirming the green line as support for now.  As long as that line stays intact the rally should also be intact.

The green count is well into overbought territory.  That often slows upward momentum or causes a pause.

All three charts are showing some potential resistance in this area.  The red/green count shows a short term overbought condition.  A short consolidation to let the shorter daily chart MAs catch up is possible.  There are still gaps to potentially fill above.  I don't see anything to indicate the rally is about out of steam, but it may pause here.

Peace and good health to all.


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