6.20.14 “S&P 500 The Balloon $SPY $SPX [Part 1]”
S&P 500 Index
[$SPX Daily Chart from the Past Article]
[$SPY Daily Chart from Last Thursday]
[$SPY Daily Chart]
As we talked about on my last market update that, as long as we are above this pivot level (see arrows), benefit of the doubt continues to go to the buyers. We are still seeing some bearish divergence on the daily chart and I think, because of that, we’ve been seeing some turbulence last 2-3 weeks. As you can see the chart “7/17/14”, even with sharp sell-off last Thursday, benefit of the doubt STILL went to the buyers because we were still above that pivot line (red). This is why sticking with a trend does help and ignoring intraday and/or daily fluctuations to absorb its volatility.
I think if $SPY can able to close well above $198.50ish with good looking candle, I think we may able to see some more upside move, but we can not forget the fact that, the major warning signal is still looming around (see article here) and no one truly knows when it’s going take effect but to be honest with you, I think its a time bomb. But as a technician, we always put most of our analysis weight on current price action rather than the possibility. So with that said, I would have to remain bullish in this market because the price action clear tells us that we are in an uptrend with well defined higher-lows and higher-highs on all major indices.
So here is how you can gauge this market using the chart I have screened on this post. As long as we are above this rising pivot level (red line) and above daily 50EMA (Because it has been acted as strong support during late April through late May), I would have to concur that the market is in bullish tone. I also believe that, as long as this market continues to illuminate and create bullish environment, I do think individual equities will do well.
Let’s look at some other indices.
Dow Jones Industrial Average
[$DIA Daily Chart]
Similar idea here as to the $SPY chart above. As long as we are above this pivot level (red line with green arrows), I would have say that the market in bullish tone. Primary, intermediate and miner term with higher-lows and higher-highs still intact, trend is up.
[$QQQ Daily Chart]
Uptrend support established while forming some kind of rising stair-step pattern here. I perceive that if we can able to close well above $96.50ish, we may continue to grind higher.
[$IWM Daily Chart]
The weakest index, but it appears that we are at the last level of Fib. Retracement (61.8%). Bulls to continue to the upside, they must keep the price well above $116.50ish level. So there still much selling pressure (despite of Friday’s candle and it is a bullish engulfing candle pattern so some hope there for the buyers), but above $116.50, I do think bulls can able to regain control back to the ATH.
Dow Jones Transportation Average
[$IYT Daily Chart]
Transportation has been very strong for sometime now respecting most of these technical levels. Uptrend support (blue dotted line) is still holding and the red pivot level is also holding. Benefit of the doubt still goes to the buyers here as well as long as these levels hold.