TradeStation

The S&P 500’s Channel Is at Risk

TVC:SPX   S&P 500 Index
Two weeks ago, we highlighted some potential topping patterns on the S&P 500 . It’s played out as expected, and now attention turns to the price channel highlighted in that idea.

Notice how prices ranged from the bottom to the top of the channel since November, including the middle of this month. But something changed this week because SPX didn’t return to the upper line. Instead, it formed a lower high after hitting a wall of sellers.

Next, consider that the all-time high occurred at 9:48 a.m. ET on Tuesday, February 16. That was beginning of the week because of President’s Day. Such early buying without follow-through can be a sign of exhaustion.

Third, MACD has turned negative.

This creates the risk of bears getting more aggressive and attempting to drive prices down through the 50-day simple moving average ( SMA ) and the bottom of the channel.

TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.

Comments

As always thank you for sharing your charts and research! We've featured this in Editors' Picks. We'll be watching this channel with you... 😬
+12 Reply
if we behave similarly to 1929, there may be a parabolic move first
+7 Reply
alienxx dudebruhwhoa
@dudebruhwhoa, all these trend lines are BS. Current SP 500 companies earn money from all over the world not just US. The underlying financials and mechanics quite different compared to previous SP 500 companies, especially the top 20. All these top companies are forefront of innovation and next gen tech. There's a legit basis for these parabolic moves.
+8 Reply
@alienxx, the world is in crisis and the market is moving in the opposite direction. A massive bubble of reverse mergers w/ defunct corporations from China account for over a trillion dollars of the US market now. Companies w/out earnings to back them up are massively overvalued based on potential for earnings in the future that may never be realized. The dollar itself is inflating out of control. A crash is both necessary and the healthiest thing that can happen to repair the damage. The difference between now and 1929 - they have a pause button now and a Fed that can print money to prop it up, it won't last forever without a correction, and that's precisely why it's called a "correction".
+14 Reply
YoYoG dudebruhwhoa
@dudebruhwhoa, If you think we are in still crisis, then there is no one that can help you. Whole Asia is back to normal at least 90%. The vaccination rates are increasing day by day. People are coming back to work and things getting normal. There is risk for the speculative companies as always. There is no doubt about that. That won’t take the whole market down because they likely fraction of the companies you are talking about.
+3 Reply
@YoYoG, Even to give your valid points, that still doesn't mean we're not in crisis. It's probably going to take decades to get employment and crime rates back to pre covid, among other things... not to mention they can turn the pandemic on or off by changing the number of PCR test cycles, in the guidance issued by the WHO. They just turned it off on Jan 20. And we see the numbers dramatically start to fall. Interesting timing, big pharma... I see you.
+5 Reply
AT_Holding_Inc dudebruhwhoa
@dudebruhwhoa, I am with you on this, this market shows the greediness of the system and the capitalist world and how far we have gone, the entire money system is flawed, I fear it will be hyperinflation and this is what driving the price, a major correction is coming that will drive policy change without printing .... this is not how you run economics, it will balance itself, what is going on in this ,market is not sustainable!
+5 Reply
@alienxx, lol
Reply
@alienxx, I am sure we've all heard this many many times - "This time its different", only time can tell!
Reply
@alienxx,
Agreed. In my opinion: trend lines are only good for assuming the psychology of the market. However, how much of the market is psychologically driven?
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar About Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Private Messages Chat Sign Out