S&P 500 (SPX) managed to put together another bounce back rally that was quite simply meaningless in terms of accomplishing anything technically.
The declining trend-line from the August highs was tested yesterday and saw a rejection in price with SPX retracing 40% of its gains on the day.
Despite breaking it early on, once again the 50-day moving average was unable to see price close above it.
Volume on SPDRs S&P 500 (SPY) rally yesterday failed to provide a good reading, coming in at the lowest since August 15th and at levels seen during a half day of trading on Christmas Eve.
Rising trend-line off of the February lows are in view again with current support at 2147. Break it, then the next two support levels are 2144 and 2120.
Taking the declining and rising trend-lines already mentioned already, you have a triangle that is forming near the highs of SPX. Typically these triangles, at this location, typically results in topping patterns that end badly for the bulls.
Crude (/CL) made a big move yesterday on rumors Russia is willing to freeze or possibly cut production, causing oil to spike 3%. Now it is setting up for a move back to the June highs.
Nasdaq (COMPQ) is the strongest index by far right now and it had a great opportunityh to establish new all-time highs, but fell short by 2 points.
Despite the rally yesterday, the CBOE Market Volatility Index (VIX) barely saw a drop yesterday.
Price action on SPX 30 minute chart is absolutely unintelligible over the last 2 weeks. Simply chop-city. It does fall in nicely with the triangle pattern over the past month.
Ryan Mallory is the co-founder of SharePlanner Inc, a financial website devoted to Day-Trading, Swing-Trading (both long & short) and exchange-traded funds. Ryan makes a strong emphasis on risk mitigation strategies, trading transparency, and trader education – not to mention a great set of stock screens as well.