7 Facts About The S&P 500
Dragonfly Capital | Sep 03, 2015 08:13AM ET
The S&P 500 has had a wild ride since Monday August 24th. Bouncing up and down, leaving islands above and below. When things get noisy in the markets it often makes sense to take a step back and look from a longer perspective. With stock charts that means dumping your daily data and looking at weekly charts.
The chart below is a weekly chart for the S&P 500 going back to 2010. There were some wild times back then as well. How soon we forget. Adding a couple of indicators to the charts makes for a n interesting story. There are 7 interesting facts worth point out.
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1. The Andrews Pitchfork, used to identify trends, shows the correction has held so far at the lower Median Line, keeping uptrend in tact.
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2. The index has bounced off of that Lower Median Line twice to the 100 week SMA, a sticky point it seems.
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3. The long lower shadows show intra-week strength, as buyers overwhelm sellers at the lows to bring the index back higher.
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4. Accumulation has not fallen off during this correction.
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5. The current inside week shows a tightening range, consolidation, often, but not always, a sign of exhaustion in a downward move.
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6. The RSI is in the bearish zone and at levels where the index has reversed in the past.
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7. The MACD is far below 8, the level that acted as support during the trend higher, but also now at levels where bottoms in the index have occurred the last 2 times.
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None of these facts is enough to say that the S&P 500 correction has run its course. But taken together they present a decent case that the bottom may be forming now. Time to start looking for evidence that it wants to move higher now before adding money.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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