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S&P500 Cash Index Daily Chart: Point A Point X Point B Points B and C Point C

The document discusses daily price movements and signals in the S&P500 cash index. Point A showed weakness and overbought conditions. Points B and C showed the market being tested with bounces off the top trendline. Point D had low volume selling pressure, suggesting higher prices. Point E had a widespread up bar with increased volume. Point F showed a change with an up bar but lower volume, signaling increased supply and expected weakness.

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Thích Chánh Nghiệp
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131 views2 pages

S&P500 Cash Index Daily Chart: Point A Point X Point B Points B and C Point C

The document discusses daily price movements and signals in the S&P500 cash index. Point A showed weakness and overbought conditions. Points B and C showed the market being tested with bounces off the top trendline. Point D had low volume selling pressure, suggesting higher prices. Point E had a widespread up bar with increased volume. Point F showed a change with an up bar but lower volume, signaling increased supply and expected weakness.

Uploaded by

Thích Chánh Nghiệp
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© © All Rights Reserved
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S&P500 CASH INDEX DAILY CHART

Point A
25th October - Here we saw a clear sign of weakness producing an automatic signal telling us
this is an upthrust. Note Point X marks the top trendline so we are in fact over-bought.

Point B
26th October - Immediately following this upthrust the next two bars, Points B and C, the
market is being tested. A test is when the market is marked down only to close on the high
and the volume remains not excessive. Note at Point C it bounced off this top trendline. Why
trendlines work so well is not fully understood, but they do work, and you should pay attention
to them.

Point C
There is an automatic sign of strength which we call a test. As I'm always telling Gavin, ignore
the signals at your peril.

Point D
Here we have a down-bar but note the spread is very narrow and the volume is low. There is
absolutely no selling pressure left in this market. So because the market moves on supply
and demand, if there is little or no supply, then you expect higher prices because that is then
the path of least resistance.

Point E
Here we have a widespread up, closed on the high, with an increase in volume.

Point F
Friday. Here we have an up-bar but the situation has now changed. We have told you many
times, markets top out on narrow spread up-bars. I would have liked to see the volume,
although high, but much higher, for a positive yes this is the top. The programme has
produced an automatic sign of weakness telling us quite rightfully, that supply is entering the
market. You would now expect to see more weakness and lower prices, but you do have to
be aware, they may try to fool you by having an upthrust at some time.

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