S&P 500 May Have a Classic Bullish Pattern
The S&P 500 slid on Monday, but the dip could fit into a bigger continuation pattern. If correct, it may interest the bulls.
Notice the series of higher lows since tame CPI numbers launched the index higher on November 10. Also consider how SPX made highs in the same area on November 15 and 22. The result could be an ascending triangle with upside breakout potential.
The top of the triangle is within a few points of a bearish gap on September 13, which followed a higher-than-expected inflation report. Nearby is the 200-day simple moving average (SMA), which marked a peak in mid-August. Both are logical as resistance. That may increase their relevance and the potential for a move if broken.
Speaking of big moves, SPX has actually done the opposite lately. Notice how Average True Range and 10-day Historical Volatility have slipped to their lowest levels in several months. That may also increase the potential for a movement if resistance gives way.
These technical patterns may increase the important of the event calendar with major catalysts like a Jerome Powell speech tomorrow afternoon and non-farm payrolls Friday morning.
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Notice the series of higher lows since tame CPI numbers launched the index higher on November 10. Also consider how SPX made highs in the same area on November 15 and 22. The result could be an ascending triangle with upside breakout potential.
The top of the triangle is within a few points of a bearish gap on September 13, which followed a higher-than-expected inflation report. Nearby is the 200-day simple moving average (SMA), which marked a peak in mid-August. Both are logical as resistance. That may increase their relevance and the potential for a move if broken.
Speaking of big moves, SPX has actually done the opposite lately. Notice how Average True Range and 10-day Historical Volatility have slipped to their lowest levels in several months. That may also increase the potential for a movement if resistance gives way.
These technical patterns may increase the important of the event calendar with major catalysts like a Jerome Powell speech tomorrow afternoon and non-farm payrolls Friday morning.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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