As we start May, we must make note that the short-term trend of the S&P 500 (and other US Equity Indexes) has devolved into a consolidation trading range with support and resistance boundaries as shown.
Let’s take a look at the trading range and what it might mean going forward.
Even if you don’t trade Baidu.com stock (BIDU), then you might still be aware of the large earnings gap that sent the stock surging $80.00 (13%) higher last Thursday, only to give back some of those gains with a bearish engulfing candle on Friday.
Let’s take a quick look at the last three gaps in BIDU stock and try to assess how that plays into the current large gap.
AK Steel (AKS) recently sold-off sharply after breaking down from a daily triangle pattern – a great example of the concept.
Let’s take a look at the daily chart then see the damage done and potential support level to watch on the weekly frame.
With April 28th’s Fed decision to keep the Fed Funds rate unchanged, let’s take a look back on the last 10 years to see the relationship between the Fed Funds Rate and the S&P 500 … which might be very surprising to you.
The EURUSD FOREX pair has been respecting dominant Andrews Pitchfork trend channels both on the way up and on the way down. It serves as an educational example and current reference levels for areas to watch going forward in time.
With Tuesday’s sharp sell-off taking the US Equity indexes down roughly 2% each, let’s take a quick “fly-by” of the Daily US Equity Index charts to see what preceded the fall and what levels to watch as a reference now.
Once again, I’m updating a successful turnaround swing in the market that was highlighted in advance by the key Market Internals – as I wrote in yesterday’s update: “Market Internals Undercut New Highs in S&P 500”. Read that post for the status of market internals yesterday.
Today, we see the aftermath of the distinct non-confirmation/divergences in internals, showing us another lesson that “Internals DO Actually Matter.”
For the third time in the last few days, we’ve broken slightly under the rising dominant trend channel as seen best on the 60-min chart of the S&P 500.
So far, that channel has held, but today, we’ve broken slightly under the channel so let’s take a hyper-focus on these price levels and what to watch:
The S&P 500 began Monday April 26th on a push to new recovery highs, but it did so laboriously, forming negative divergences in all three key market internals we monitor.
With that in mind, let’s take a look at current lunchtime market internals in the S&P 500 for April 26:
With Goldman Sachs (GS) frequently mentioned in the news in the wake of the fraud allegations, intraday traders have sought to profit from the swings and price movement that has occurred since GS fell so sharply on April 16th.
Let’s take a look at the ‘wakes’ or aftermath of the sell-off, failed ‘bounce,’ sucker gaps, and current breakdown from the descending triangle that formed.