Archive for the ‘Trend Summary’ Category
World’s Barometer is Signaling the Way Up
As I have written on a few occasions in the past on the Market Snapshots Category, the S&P 500, or “The World’s Barometer” can usually succeed in showing the trends the markets may be taking and give a glimpse into what may lye ahead for the World’s Financial Markets as well as the Global Economic Markets as a whole. It seems that the worst may be over now for the US Markets and the World’s Economies as the SPX, after topping out in late April, forming a solid U top, is now signaling a clear bottom both with a double bottom on the Daily Chart below, and a major Japanese Candlestick OKR, an engulfing pattern as shown on the Weekly Chart at the bottom and explained in my OKR Tutorial.
This is the way the Daily Chart looks:
This is the way the Weekly Chart looks:
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SPX—Correction At Its’ End
As these lines are written, the S & P 500 Index, the one I call The World’s Barometer, as it gives a relatively sure indication of the world markets’ direction, seems to have ended the correction I spoke about in previous articles in this Category. It has, as shown in the Chart below, made a significant Japanese Candlestick pattern called a Hammer and it does indeed look like one. This hammer gives the final blow to the downwards descending pattern and the verification, or Trust, we see tonight is the beginning of a new upwards trend.
The blue lines that surround the price candles are Donchian Channels. When the prices hug these channels at the high end or at the low end for some bars, the prices tend to go up to the signal line (red–in between) and many times past it and correct to the other extreme. Here we see that the Donchian Channels were tested most of the week, and now seems the price’s chance to correct is coming. And it comes just in time.
The Retail Market in the U.S., as represented by their respective equities, is starting to recover from the blows of this harsh Correction. The SPX correction was at the 61.8% Fibonacci Correction Level and those tend to be particularly harsh most of the time. Please check out the Daily Chart below, of a trend-reversal day at 1:33 p.m. EDT of the United States. It speaks for itself.
This is the way the Daily Chart looks:
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Standard and Poor’s Index, Returning to Grace
We can quite clearly see that the S&P 500, Standard and Poor’s Index of the 500 leading World Stocks traded on the Wall Street Stock Exchanges is on a terrible downturn lately and has seemed to disgrace the recovery position we thought ourselves to be in and cause a new flare up of “analysts” predictions of a double-dip or a new economic crises to which there is no shred of empirical evidence.
In fact, if you look at the Weekly Chart below, you will see the upwards trends, lines that may indeed be followed by the prices and do indeed indicate an upwards movement. Also you can see the dotted lines, representing Fibonacci Correction levels, returning upwards at the 23.6% level. This is a line that is also an historical s/r line and is standing strong here as a support for the price levels of the Index.
In addition, if you will observe the Daily Chart you will see the Piercing Candle (a green candle from Friday’s session that pierces the big red candle from Thursday through more than half its’ height up and conveys a sign of trend shifting), giving us hope that the weekly lines will hold in addition to the support line that is right at the weekly close mark.
Friday’s sigh of relief after an early day plunge that ended up in an upbeat green candle showing over a 1.5% move up in price level compared to the previous close gives us a fundamental reason that the optimism of the capping up of the week will slide on down to this coming week. Since I am an incurable optimist, I do indeed believe that the business cycle is in a recovery phase and not headed to dip itself anywhere dangerous until the next foolhardy and greedy businessperson gets a new idea about some “very special” profitable financial instrument that can be a potential poison to us all. And, economically speaking, there is no reason for the market’s panic over the last period, hey guys, everything will be all right, promise!
This is the way the Weekly Chart looks:
This is the way the Daily Chart looks:
