First, on the long term chart, notice that (A) prices have broken through a long-term trend line that started in March.
Prices have also moved through the trend line started in early July.
A.) Prices hit the 50 day EMA and bounced higher. This is also the same price level established at a high point in August.
B.) The 10 day EMA is about to move through the 20 day EMA. This is not fatal as it is a short-term trend.
A.) Prices did not follow-through (move higher) after a strong showing on Monday.
B.) Prices dropped hard on high volume but rebounded. However,
C.) Prices moved through the same trend line again later in the day on high volume.
D.) As prices moved lower they continued to consolidate gains in upward sloping pennant patterns.
E.) On Friday, notice that prices had a slight upward bias. However, this can be seen as a long, upward sloping consolidation pattern on the way lower.
1 comment:
Bondad:
As always your postings (and those of Invictus and New Deal Democrat) are interesting and thought provoking. So here is a puzzler. Your trend lines on SPY look to be right on, with both longer trend (beginning in March) and intermediate trend (beginning in July) having been broken. Using Yahoo Finance graphs (which I usually do) I find that the Intermediate trend starting in July has been broken, however the long term trend beginning in March has not been broken. My first thought was linear scale versus log, however your graph and the Yahoo graph I am using for the longer term trend are both linear. So I went to Google finance (to get a different independent graph) and looked at their weekly chart and found that there too the long term trend was still in place. Again, if I was to draw the long term trend on your graph, I come up with the same conclusion that your have.
That is the puzzler. What am I missing? Have you ever run across this type of thing before?
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