Saturday, January 24, 2004
SPX 60m chart in the spotlight
Complete Charts Update (MANY MANY of them) [ edited: stockcharts.com list no longer active ]
There's quite a bit on this chart, some for targeting, some for learning.
(1) LEARNING: In an idea from Ron Wheeler, 'mini' Regression Channels are used to gauge when (and if) a rebound off a pullback low is buyable. The channel is complete on the first higher low off a pullback. SCC's % is a bit wide for this purpose, so I've sketched in tighter bands using hi/lo's within the band. The orange arrows mark the Buy Signal (first closing bar outside the band).
(2) This move was very geometric, the high being within a hair of an AB=CD off the low. A comparable AB=CD pullback is -1.3%, or 1135.5.
(3) This 1135.5 is also confluent with two Andrews crossing, an just above the 'pullback mini-fork' (the black one) at 1136. That the low price was 1136.85 is a bit troublesome (a tail touch of 1136 would have been more ideal), suggesting perhaps a test of that 1136 before a move back up.
SUMMARY: A break of 1144 (with a corresponding break of the RSI overhead trendline) is a buy, however, with diminishing returns as there is now resistance at the recent highs. A break of 1136 confirms a deeper pullback.
(click for full size image in new window)
At last, over the rim
of the waiting earth
the moon lifted with
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows