Can the S&P 500 Turn Higher?
The S&P 500 is mired in one of its longest negative streaks ever, but now there could be signs of a turn.
The first pattern on today’s chart is the potential hammer candlestick on Friday, May 20. It was a brief probe not only to new 52-week lows, but also the official “bear market” line. Prices refused to stay down, resulting in a potential reversal pattern.
Second is the level around 3877, roughly the lows on Thursday. Prices tested that area yesterday but quickly reversed, which could mean that new support is developing.
Next, the Advance/Decline Line has inched higher since May 11. That improving breadth is a potential non-confirmation of the recent drop.
Finally you have the trendline along the highs of April 21 and May 4. This may create the potential for a breakout and rally. (Consider the moves in early October and mid-March as precedents.) Also notice how the RSI indicator made higher lows and broke out of its own downtrends before both moves.
Traders may want to monitor the activity today, especially with minutes from the last Federal Reserve meeting due at 2 p.m. ET.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the potential hammer candlestick on Friday, May 20. It was a brief probe not only to new 52-week lows, but also the official “bear market” line. Prices refused to stay down, resulting in a potential reversal pattern.
Second is the level around 3877, roughly the lows on Thursday. Prices tested that area yesterday but quickly reversed, which could mean that new support is developing.
Next, the Advance/Decline Line has inched higher since May 11. That improving breadth is a potential non-confirmation of the recent drop.
Finally you have the trendline along the highs of April 21 and May 4. This may create the potential for a breakout and rally. (Consider the moves in early October and mid-March as precedents.) Also notice how the RSI indicator made higher lows and broke out of its own downtrends before both moves.
Traders may want to monitor the activity today, especially with minutes from the last Federal Reserve meeting due at 2 p.m. ET.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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