Jump to content

Index Trading


Recommended Posts

As noted on Sunday and yesterday, the SPX’s Friday downturn (just barely) triggered a new bearish pattern. With Monday’s immediate lift higher, the formation never had a chance and was promptly negated.


Given that yesterday’s bounce remains below the recent highs, there’s still a possibility for the pattern to morph into a bearish H&S formation,It’s all about the follow through now.


And the SPX has made a habit of following through to the upside after a “technical situation” like this: An upside reversal near the 50 Day MA that has voided a bearish formation eventually has led to new highs. This is the third such occurrence since March.


We’ve been tracking the appearance (and success of) bearish patterns in 2021, with the last three all being voided. Each happened at, or near, the SPX’s 50 Day MA


Holding near the 50 Day MA is nothing new, of course. This is the eighth visit to the line since the SPX recaptured it back in April.


Some were clean “one and done” reversals. Other times, the index aggressively pierced the line before rallying, while in some instances, it took a quick revisit before a true bounce materialized.




SPX over 4 points higher , seems it is consolidate yesterday's bounce.


seems there is nothing can stop this bull market at moment!!



Link to comment
Share on other sites

  • Replies 16.6k
  • Created
  • Last Reply

Top Posters In This Topic

  • early birds


  • Danville


  • arty


  • blueice


Top Posters In This Topic

Posted Images

With major US indices in a seasonal “quiet period” between earnings seasons and the Fed on hold, traders are likely to take their cues from technical developments


This week’s bloodbath in the crypto markets is garnering all the headlines, but yesterday’s big bullish reversal in global stock indices is the more important development for most traders and investors.


Following a period of low volatility, markets were spooked by hotter-than-expected inflation figures and last week’s big hawkish shift from the Fed, leading to the S&P 500’s worst week since February. The rubber band snapped back yesterday, with the index seeing a sharp 1.4% rally off support from the 50-day exponential moving average and the bottom of the well-established bullish channel.


With major US indices in a seasonal “quiet period” between earnings seasons and the Fed on hold, traders are likely to take their cues from technical developments, at least until next Friday’s Non-Farm Payrolls report, and from a purely technical perspective, the bias for the S&P 500 remains bullish. After two months of consolidating near record highs, yesterday’s price action created a “Bullish Marubozu” candle, signaling strong buying pressure throughout the day:


Considering the strong support from the 50-day EMA and rising channel, as well as a consistent floor at 40 in the RSI indicator, bullish traders could consider buy trades near current levels with stop losses below support in the 4150 area and a target somewhere in record high territory around 4300+.


This general technique, where you limit your downside risk while trading in the same direction of the established trend, can help put the odds in your favor over the long run, though any individual trade can always still fail.




expecting asx200 to follow today.

Link to comment
Share on other sites


As we’ll recall, prior to the Fed-induced sell-off last week, the SPX made marginal new highs for a few days. While that “triggered” the next bullish formation, the index’s tiny daily movements failed to encourage necessary upside follow through.






Because of that, we wanted to be patient, and the would-be target above 4,400 never appeared in the Live Pattern Grid.






A week later, a now much bigger potential bullish pattern has formed. And while it could take a bit more time to see a fresh breakout, it could very well be worth the wait.






That’s because it’s a very similar set up to the technical pattern that preceded the early April breakout. In fact, said breakout has been the only one all year that garnered additional demand AFTER making new highs.






Regardless, we can’t deny the symmetry here. The SPX spent the majority of the 1st quarter zig-zagging in volatile fashion, which finally changed in the Bulls’ favor as the 2nd quarter commenced.




The index now has spent two-thirds of the 2nd quarter (May and June) oscillating once again, as it has consolidated that April breakout.






The OTHER common theme for both periods: all of the action has occurred within the same upward sloping channel.




end of financial year is near for asx200, expecting sorta "window dressing" activities ....

Link to comment
Share on other sites

US indices hit new highs on bipartisan deal:

Wall Street finished on a high note as US President Joe Biden confirmed a bipartisan Senate deal for a $1.2 trillion infrastructure plan. Furthermore, after market closed it was confirmed that banks had passed the Fed’s stress tests which paves the way for more buybacks – another pillar of support for equity markets.


The Nasdaq 100 rose 0.64% (and up 2.25% WTD) and hit a fresh record high, although take note of the bearish pinbar whilst RSI (2) hit an overbought level of 94.3 which warns of near-term exhaustion. The S&P 500 rose 0.58% (2.4% WTD) and also closed to a record high without a reversal candle and RSI (2) is not yet overbought at 85.7. 9 of its 11 sectors closed in the green led by the financial sector. The S&P 600 small cap index was the strongest mover, up 1.6% (4.7% WTD) and the Nasdaq bank index rose 1.5% (5.1% WTD).


Futures market point to a positive open across Asia, so we may see this spill over to the ASX 200 and break its two-day losing streak. Tuesday’s large bullish inside day shows support at 7235.30, although notice that yesterday’s lower wick found support at the 20-day eMA, so as long as prices don’t drop too sharply earlier in today’s session we would seek a break above 7303.8 to suggest bullish continuation and bring 7344 resistance into view. Ultimately, our bias remains bullish above 7235.30.




few days to end of financial year for aussie market , good trading opps. imho

[fidies get their bonus and we get our little scrapie] :lol:

Link to comment
Share on other sites



“2021 [is] tracking to be a +20 per cent year,” Mr Lee said. The S&P 500 was up about 14 per cent in the year so far as of Friday afternoon.


While it “certainly seems to be a tall order for the S&P 500 to rally to 4400 before month-end … I think it could happen,” Mr Lee concluded.


“OK. Maybe by mid-July,” he hedged.




the guy is a permabull. so as bull market keeps going ,so he is "right" all the way so far....


i'm not sure about asx200 today, as virus fear vs end of financial year window dressing.......... really not sure :unsure:



Link to comment
Share on other sites

The SPX starts the last day of the month, quarter and first half with its fourth winning streak of at least four in 2021. The total +1.18% four-day move isn’t anywhere close to the best four day moves we’ve seen this year though.






The question, of course, is how much more immediate upside can the SPX manage after ripping through multiple milestones lately, including yesterday’s kiss of 4,300?






For one, simply getting TO a round number hasn’t influenced a rush of demand over the last few months. As noted in “Ten Tidbits SPX 4,300,” last night: Of all the round number new highs that the SPX has achieved since first hitting 3,400 back in August'20, the only level that was NOT tested on a subsequent pullback was 4,000.






But what the SPX HAS done throughout 2021 is pick itself up when and where it has needed to, maintaining an uptrend all along. Recently, it’s adhered to the middle of the long-term trading channel.






11 ETFs we track finished with winning streaks of at least six on Tuesday. While all are stretched, 5/11 of them (ARKK, TAN, XLY, MTUM, FFTY) still are battling key supply zones, which makes their short-term risk-reward scenarios challenging.






As of last night, about 19% off the index NDX are trading above their respective Upper Bollinger Bands (UBB). While that’s the highest level since early March, we’ve seen this number get a LOT higher during spikes since last September.





Link to comment
Share on other sites

Since central banks began providing stimulus after the early days of the pandemic, stock indices have been on fire! Equity Indices have continued posting gains throughout Q2, 2021, with most reaching all-time new highs. Q2 gains in our most widely traded stock indices are as follows:


Wall Street: +3.97%

US Tech 100: +11.20%

Germany 30: +3.56%

UK 100: +4.77%

US SP 500: +7.81%

But with many central banks beginning to taper bond purchases (reducing stimulus) or discussing when they should begin tapering, stock indices may be nearing a top. During Q3, July is typically a slow month as many traders take advantage of the warmer months to travel and go on holiday. August could be “hit or miss”. At times, August may have some volatility, especially near the Jackson Hole Symposium. However, during other years, it could be dull, especially the week before the Labor Day holiday in the US. Volatility usually picks up in September, with traders returning to their desks and trying to get ahead of what they hope will be a big Q4 run. There is also an important FOMC meeting this September traders will be waiting for. Markets will be watching intently to see how committee members will adjust their outlook on growth, inflation, and interest rates. Below are levels to watch for in our most widely traded indices:


Wall Street


The Dow Jones Industrial Average had been moving higher since the early days of monetary stimulus in March 2020. The widely followed US stock index briefly traded above the top rising trendline of an ascending wedge and reached an all-time high of 35,091 on May 10th. Price has pulled back into the ascending wedge, in what currently appears to be a corrective. There is still room to put in new highs without going above the upper trendline of the rising wedge. However, the DJI will first have to break above the corrective channel trendline at 34,500. Above, resistance is at the top trendline of the wedge and the May 10th highs near 35,091. Above there, resistance is at the 127.2% Fibonacci extension from the June 7th highs to the June 18th lows near 35,301. Support is at the June 18th lows near 33.271, then the bottom downward sloping trendline of the corrective channel near 32,890. Below, horizontal support crosses near 32,009.


US Tech 100


The Nasdaq 100 has also been moving higher since the pandemic lows in the spring of 2020. The tech heavy index put in a high on February 16th near 13900.5, before correcting in an Inverse Head and Shoulders pattern. After testing the neckline of the pattern several times over the next few months, the index finally reached the Inverse Head and Shoulders target during the last week of June near 14,400. The index also put in all time new highs on the last day of Q2 at 14,598.50. Resistance is at the 161.8% Fibonacci extension from the April 29th highs to the May 14th lows near 14,775 and then the upward sloping trendline of the September 3rd highs near 15,139. Notice how the RSI is in overbought territory and tuning lower, an indication that price may be ready to pull back. First support is at the previous highs near 14,075, then horizontal support from previous resistance near 13,773 and 13,416.


Germany 30


The German DAX has also been on the rise since the pandemic low, however, the market had a quick correction in October 2020 on its way to recent highs as price sold off from 13,184 to 11,645. After recovering in early November 2020, the DAX continued higher in an orderly channel trend. Price briefly traded above the channel in early April only to move back into the channel after a few weeks. Since then, the German index has been forming an ascending wedge within the channel. The DAX put in all time highs on June 15th at 15,803, however has struggled since then to make new highs. Resistance is at those recent all-time highs of 15,803, which confluences with the top, upward sloping trendline of the wedge. Next resistance is at the top, upward sloping trendline of the channel near 16,075. Support is at the bottom wedge trendline near 15,475, then the bottom channel trendline near 15,150. The next support level is at the May 13th spike lows of 14797.


UK 100


Moving over to the UK, the FTSE 100 has led a similar path to its current level as the DAX. After having a similar correction to the DAX in late October 2020, the FTSE 100 bounced and formed new highs on January 7th. After pulling back, the index continued to trade higher to current levels in a ascending wedge formation. All-time highs were formed on June 16th at 7,215.7. Price is approaching the apex of the wedge. The target for the breakdown of an ascending wedge is a 100% retracement, or near 6,315. Resistance is at the recent highs and the upper trendline of the wedge. The next resistance level is the 161.8% Fibonacci extension from the January 7th highs to the February 1st lows near 7,418.2 There is a band of support below at the Fibonacci retracement levels from February 1st to June 16th, between 6,645 and 6,859. Below, support is at the February 1st lows near 6.298.


US SP 500


As with the previously mentioned indices, the S&P 500 has been moving higher off the pandemic lows since March 2020. From September 2020 to November 2020, the large cap US index has been moving higher in a wedge formation. As with the Nasdaq 100, the S&P 500 made new highs at 4,305.5 on the last day of the month, quarter, and ½ year end! The first resistance level above the June 30th highs is the 127.2% Fibonacci extension from the May 7th highs to the May 13th lows, near 4329.6. Above there, resistance is at the upper trendline of the wedge and the 161.8% Fibonacci extension near 4,409.5. First support is at the May 7th highs of 4,266.7, which confluences with the bottom trendline of the wedge. Below there, horizontal support crosses at 4138 and 4035.6.


One item not mentioned that may come into play is a resurgence of the coronavirus, this time the Delta variant. It’s too early to tell how this may affect the markets, however localized lockdowns and restrictions seem feasible if the virus spreads. This may affect monetary policy and in turn, affect global equity indices. Be alert to virus and vaccine headlines throughout the summer.


During the beginning of Q3, equity indices should pick up where they ended Q2, which is moving higher. However, as central banks continue to taper or talk about tapering, markets may begin to roll over. For most central banks, this seems likely toward the end of August or sometime in September (except for the BOE who have already begun tapering). Central banks are keen on jobs and inflation data and will focus on these in determining monetary policy.




it just one of many "educated guess". DYOR as always!!


Link to comment
Share on other sites

Since 1928, the SPX has been higher in July 55/93 years (59% of the time), with an average move of +1.6%.

Over the last 20 years, the biggest July advance occurred in 2009 (+7.41%); the worst in the last 20 years took place in 2002 (-7.90%).

The SPX has advanced in July 13/20 years, with an average move of +1.2%. And it’s been a lot better lately, with the index having been higher in July six straight years starting in 2015. It’s been higher 7/9 since 2012, as well. The average move over that time frame has been +2.5%.

The 20 Year track shows a pretty consistent upward path for the month, which then typically has led to a sub-par August.

With the SPX’s 2.2% gain in June, the index logged its fifth consecutive monthly advance. This marks the SEVENTH run of at least 5 straight positive months over the last decade.

Three of the prior six stopped at five. The longest monthly winning streak since 2010 was 10 from April’17 through January’18. In the 1950s, there were THREE 11-month win streaks.


The SPX concluded the quarter with its fifth straight DAILY gain, as well. This is the THIRD streak of at least five in 2021.


Since 2017, there now have been 23 winning streaks of at least five. Of the past 22, the SPX was higher 10 trading days later 73% of the time, with an average move of 0.70%.




they gave the stats , bullish as it is.


we might see some up side for asx200 today or tomorrow. imho.

Link to comment
Share on other sites

It’s a fairly quiet week for economic data, albeit with a couple of highlights worth watching. For AUD and ASX200 traders, Tuesday’s RBA meeting will be worth watching, though Governor Lowe and company are unlikely to make any immediate changes with Sydney locked down on COVID fears. We’ll also get an more details on what prompted the big hawkish shift from the Fed last month in Wednesday’s FOMC minutes. Finally, the G20 Meeting on Thursday and Friday will garner some headlines, though the immediate market impact may be limited.




to me----- RBA will keep jaw boning "loose monetary policy" . thus , asx200 might pop up little towards to 7400ish!! imho though!!

Link to comment
Share on other sites

On a closing basis the ASX 200 has been confined at an 87-point ranger over the past three weeks. Promising breakout patterns have failed to be confirmed and breaks have instead reversed, providing range trading strategies with optimum conditions. So, if prices can hold above the 7216.6 low then perhaps we may see another bounce back inside its range today.



with sydney virus situation..... i'm more bearish than 7216 low. think asx200 might dip through that level. imho though!!



Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...