Andrews Pitchfork Trendline Tool Update on the SP500 Apr 22

Apr 22, 2010: 11:08 AM CST

Let’s take a quick look at the rising trend channel lines ‘auto-generated’ from the Andrews Pitchfork charting tool to note where we’ve come and where we are now between these lines.

Andrews Pitchfork Tool:

(Click for full-size image)

Starting the tool as shown (November 2008 low, January 2009 high, March 2009 low), we see the following grid of trendlines that have uncannily served as inflection points and boundaries along the way in the angular track price has taken since the March 2009 low.

Always realize that advanced charting tools are never ‘magic,’ but can be helpful when combined with other forms of chart analysis.

The main thing to note now is that the immediate upper boundary will hit the 1,250 level soon and the current trendline rests near the 1,200 level.  Beneath that, it’s 1,160 for trendline support.

In fact, let’s zoom in on the recent action – using the same parameters – to see the ‘auto-trendlines’ better.

Zoomed-in View:

(Click for full-size view)

That’s better.  The market has been in rally mode so long that it’s hard to see the recent detail due to the scaling!  That’s indicative of a very powerful tool.

Like any sort of trendline tool, watch what happens when price tests or touches one of the dominant trendlines, and if it holds as resistance, expect price to move down to the lower rising trendline.

However, if price breaks above a trendline, expect price to travel to the next trendline.

For those that don’t use this tool, consider it one of my “Chart Art” pieces!

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

2 Comments

2 Responses to “Andrews Pitchfork Trendline Tool Update on the SP500 Apr 22”

  1. tgarfield Says:

    Try the pitchfork with the weekly chart and use the close instead of peaks and you get another interesting one. That is the one I use. In log.

  2. tgarfield Says:

    I meant daily not weekly.

    Another intersting one is the DOW using quaterly high lows and start with the 1915 opening quarter close and the 20's high and the 30's low (log and quarterly closes)