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Dowtheory

SPX: The bulls won once again!Hello traders and investors! Let’s see how the SPX is doing today! We are in a very strong bull trend, as usual, and the index is just retesting its supports before it jumps again. We have been saying this for a very long time now, and since we apply Dow Theory in our methodology, we know that trends persist until a clear reversal occurs (Dow Theory, 6th tenet). As long as we don’t see any reversal around, there’s nothing to do, but buy when it does a pullback. Thanks to this strategy, we nailed every single movement on SPX since last year. Now what’s for us here? The index is far from the 21 ema and we have no bullish pattern around. We don’t have any bearish sign either, but this only makes me neutral on the index. If we drop, the 21 ema and the 4,501 are support levels for us to work with in the short-term. In the mid-term the 4,480 is still a nice support, which is above the 21 ema. Technically, the index could drop to the purple trendline, and the trend would still be bullish , and for this to happen, we must see a strong bearish structure in the 1h chart first. But again, I don’t see it as a buy because the risk/reward ratio is not the best, and I always like to buy near support levels, like when the index did this fantastic Piercing Line candlestick pattern just above the purple line. We buy in moments like this, not right now. Some individual stocks are looking much better, and if you know where to look, you’ll find some undiscovered gems around. If the index drop, probably it’ll create even more opportunities. If you’ve read this far, remember to follow me to keep in touch with my daily updates, and please, support this idea if you liked it! Have a good week.
SP:SPX
by Nathan_The_Finance_Hydra
3
AMD: Pullback + Low Volume = Dow Theory 5th Tenet.Hello traders and investors! Yes, AMD finally hit the 21 ema in the daily chart, which is something we were already expecting since our last study, but is it a good time to buy? We’ll see. This analysis is another real-life example of how to apply Dow Theory in our chart reading. Last week I said to you and I’ll just quote myself: “I would prefer to see it at the 21 ema , and there’s still a good chance that we’ll see this happening.” This analysis is public, and the link to it is below this post. But there’s something else, as it is not only the 21 ema which is holding the price, but the 50% Fibonacci’s Retracement too. Therefore, we are sitting at a very strong dual-support level, and now it is the best place for a bullish reversal pattern. The fact that AMD dropped with low volume confirms that the recent drop was just a correction. According to the 5th tenet of Dow Theory , the volume must increase when the movement favors the primary trend, and decreases when the price goes against it. Clearly, the primary trend on AMD is bullish, and drops are just corrections. Not only the odds favor the bulls, but the Risk/Reward ratio too. The price was above the $ 120 recently, and now it is a terrible time to sell. If I were shorting it, I would probably be buying it back right now at the dual-support level, as the chances of a reversal are high, and there’s not much more downside potential. In the 1h chart, we don’t have a clear bullish structure, but if AMD defeats the $ 106.17 it’ll bring something new , and might be the beginning of a bullish reversal. Personally, I’m not convinced that AMD will fly again so soon, and I would rather prefer to see more sideways movement for a while. However, I agree that now it is the best place for AMD to find its bottom and start doing bullish patterns again. If you liked this analysis, remember to follow me to keep in touch with my daily updates. Thank you very much!
NASDAQ:AMD
by Nathan_The_Finance_Hydra
2