I wanted to share another “Chart Art” post using two advanced technical (charting) methods on the S&P 500, which has been containing the recent rally quite nicely within its bounds.
Let’s take an updated look at the Gann “Square of Nine” trendlines and the default Andrews Pitchfork Tool:
While the title might not sound that interesting, it can be important to watch “Angular Momentum,” or in simple terms – the change in the angles of rising trendlines – of the current SPY and S&P 500 intraday charts, which highlights an important point about the recent rallies.
Let’s take a look at the recent “Angular Momentum” chart and see what I mean:
I often advocate taking a pure price look at a market in order to get information on the recent “character” and “behavior” that you might miss if you have too many indicators on your chart – something we all have done at one time.
Here is the ‘price purism’ chart of the @CL crude oil futures contract:
It’s time for this week’s “Indicators the Disciplined Investor is Watching” from Andrew Horowitz – with this week’s update being titled: “Three Percent Mutual Fund Cash is Troubling.” Andrew pays special attention to the recent data that state mutual fund cash balance totaled 3.6% in both December and January – which is often a counter-indicator,…
Aaaand we’re off! Buyers pushed prices higher to trigger yet another round of ‘popped stops’ not only this morning, but over the last few trading sessions.
Let’s take a look at the recent ‘popped stops’ rallies and how they reveal the character of the market… and what that matters to you more than indicators or anything else.
For those who follow gold and the S&P 500 closely, you’ve certainly noticed that prices are diverging after GLD’s peak on March 3rd while the SPY (S&P 500 ETF) continued on to new recovery highs and *may* have peaked Friday.
Let’s take a look at the 30min combined chart to see the positive relationship… and where it recently hit the rocks.
I wanted to highlight a few quick recent charts of how the US Dollar Index positively correlates (moves in the same direction) with the 3-month Treasury Bill Discount Rate.
It’s not the most fascinating topic, but it’s definitely important to know of this relationship, so let’s take a look at a couple of recent charts.
Following up from yesterday’s post “Get Ready for Range Expansion Play from SPY Intraday Triangle,” we see that we indeed get the range expansion breakout trade as expected by the symmetrical triangle of yesterday.
Not only does it serve as a great example of real-time identification and follow-through of the pattern, but we see a similar though smaller compression triangle forming today at 1:00 EST on the SPY.
If you’ve been lulled to sleep by the recent intraday market action, don’t fret.
According to the long-standing price principle of “Range Expansion and Contraction,” the next move in the market is likely to be a range expansion breakout swing move, that will offer opportunities for those aggressive enough to take them.
Let’s take a quick ‘pure price’ look at the S&P 500 ETF SPY and note the symmetrical triangle compression and the boundaries to watch for a potential breakout.
I love highlighting Measured Move Patterns (very similar to flags) in the markets due to the price pattern symmetry and structure – each one serves as a great educational reference of this not-so-common pattern.
Fewer people know what an AB=CD pattern is than do a bull or bear flag – though the two patterns are similar.
Let’s take a look at today’s AB=CD Measured Move and see how we could have traded it so we’ll know this concept next time it forms.