S&P 500 and Dow jones index finished red with SPX was down .37 % and djia chart was .53% yesterday. This week market seems to behaving erratically. One day market is up and next day market is down. Ultimately market is not moving that much. This could be happen because market is expecting a big news or possible last 3 weeks down trend will change. Today we see spx with very strong green candle and easily exceed the hammer candle in the first hour of trading. This is classical bullish hammer pattern for day trading for long position.
Yesterday as market heading to the down side, it was expected market may heat the 200 day moving average for s&P 500 index. However as index started to pull back when it reach 2025 point whereas next pivot point were in the 2022, bear control to the market seems loosen and bull has taken control at the end of the day. Ultimately index closed with hammer formation. Now we have to see how market opens tomorrow. Today market easily exceed the hammer candle stick and make a bullish hammer pattern for market technician. Possible reversal for the market current short term trend will be the next step if spx continues to show its upward strength. Another point is SPX was in the lower band of the Bollinger yesterday and closed above the lower band of the bollinger. This was another indication that market short term down trend will change or at least halt for some period. Today S&P 500 performance proves the validity of the chart and boillinger band signals.
Dow jones index in the yesterday morning broke the its pivot point at 17400 point and headed down to 17331 points. However, index pull back from its lowest point and closed in 17435 points which is above the pivot points low. This was a good sign to break the pivot point all the way and at the end index closed above the pivot point. Dow closing reminds that bear is losing its strength and bull is trying to take control of the market. Even though down jones index pull back from its recent high 18096 points to 17340 points, pull back was controlled and seems to trader and short term investors were taking profit from the market. That’s why this pull back is bullish and seems to possible overall market trend reversal is possible very soon.
Market volatility indicator VXX was weak even though market was going down last 3 weeks. Historically VXX shows strong sign of upward move as market headed to the strong down trend or crash. However, we do not see any big spike in vxx last couple of weeks . Interestingly, Vxx was also going down as market was in the pull back mode. Today vxx gap down clearly bullish sign for the market. This means investors has very strong confidence to the market and a possible trend change will happen.NOTICE: This article was based on research of stock market information and other sources of information, found both online and in print media. Neither tradingninvestment.com nor any of its owners, contributors, officers, directors, consultants, or employees take responsibility for the accuracy of the information contained in this article or the accuracy of the information on which this article was based. tradingninvestment.com was not compensated by any of the companies mentioned in this article for the preparation of this material, nor were the materials approved by the companies which were mentioned.