5m SPX – 5 Day Trend Line Resistance (update 1)
11/17/2010 1:19 pm 4 Comments
There is still validity in the upward TL on the 5m chart.
Today ended showing:
- Divergence between the stochastic pullback and the tight consolidation of the market.
- S&P stochastics ending the day in a falling wedge pattern.
- A gap between the S&P and multi-day resistance TL
These are 3 bullish technical indicators. Looking for 1185 and up this week in the S&P to unwind some positions before further downside, or until this TL is broken.
Divergence involves a pulling back of the stochastic indicator (at the bottom fullK and fullD pulling back to oversold), and the price level on the chart (holding a consolidation, or moving up). Click here to show divergences drawn on the chart.
It is always necessary to look at other time frames. Here’s a look at the daily S&P chart. The 5m chart has the TL extended to a ray on the right which continues on the daily chart. We expect a convergence to the ray during this week – timing uncertain.
NOTE: This is only technical analysis. Reports, news, and other fundamentals should always be considered when making trade decisions.
I think the market is in a deterioration trend. It’s worrisome at this point, considering that we had a selloff yesterday with pretty big volume and poor advance-decline numbers
Not looking for a long-term move up. Just looking to unwind some positions by the end of the week and these are the levels.
I agree with you in the long-run.
#Fundamentally_Counterintuitive
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