Mon Dec 17, 2018, 09:57 PM

(SPX): S&P 500 Index (Dec 17th analysis)

I thought to post some market analysis using some basic technical analysis and also using an important (fundamental) indicator, the bond market yield curve (see video). I also added another short video to show you some more fundamental analysis to add to the technical analysis I have posted below with the price charts.

With the technical analysis (price chart analysis), posted below. I know most people are not familiar with technical analysis so I have included some links in the descriptions to aid in the understanding of the indicators I have indicated on the price chart for the S&P 500 Index.

This guy gives a good presentation showing the bond market yield curve in this short video. I recommend viewing it.

This same guy gives some more good presentation using other fundamental market data. I also recommend viewing this shorter video


If you right-click the images and select view image you'll see the image's full size.

In this first image of the S&P 500 (Daily) chart. Each candlestick represents one day. I have drawn a trend line (the red line), and as you can see it is a well established line of support. . And as you can also see it has recently been violated and a basic fundamental technical rule of thumb regarding support & resistance is once support or resistance is violated it often times reverses and previous support becomes resistance and previous resistance becomes support. And we do see that established on this chart.


In this image we can see a line (the red line), showing where price has established support and has on a number of occasions been a line of support. That is until today. The last candle (today's candle), shows this support price level has been violated.


In this image I am showing that after the October market sell-off the market formed a consolidation pattern. And as you can see from the last two candles (yesterday & today), a breakout to the downside has happened.


In this image I am showing a few moving averages. As a general rule when price crosses below a moving average it is a bearish indicator and vice versa when it crosses above a moving average its a bullish indicator. Furthermore slower (greater number of days) moving averages have more weight than faster (lesser number of days do).

Also, when a faster moving average crosses below or above a slower moving average. Its the same thing.

An important crossover in moving averages is when the 50-day moving average crosses over the 200-day moving average. When the 50-day crosses below the 200-day it is what is called a Death Cross. When the 50-day crosses above the 200-day it is what is called a Golden Cross.

As you can see in this image last week we had a Death Cross occur.


In this image I am indicating a few different candlestick indicators. The first one is what's called a Doji. It is an important candlestick in that it is often times shortly precedes a price reversal.

The second indicator we can see is what's called the Shooting Star. Another important candlestick in technical analysis. It is an important candlestick in that it usually indicates a top and it too is often times shortly preceding a price reversal (to the downside). Basically what it is showing is that the market went up in price from the open and then repudiated that higher price and closed out while falling back down to or past the opening price. In other words, the price shot up and burned out like a shooting star.

The third indicator we can see is what's called a Gap. A Gap is important because it is illustrating something has/is occurring in the market to cause enough people/enough money to place trading orders during non trading hours to cause the price to gap up or gap down when the market opens. Also it is important to know the difference between a Breakaway Gap, a Common Gap, an Exhaustion Gap, and a Runaway Gap.

This chart is also indicating bearish.....


Lastly lets look at the S&P 500 Index using monthly candlesticks where each candlestick represents one month of trading. Lets take a look at this longer period chart because longer periods show longer and thus more established trends and other price actions.

In this first image, like the first daily chart image, I have drawn a trend line. As you can see the trend has been violated and has become resistance. Given that this is also showing up on a monthly chart gives this bearish indicator more weight.


Lastly lets look at a technical analysis tool called Fibonacci Retracement. There are three Fibonacci Retracement numbers (I have circled on the left side of the image), I consider a bit more important than the other numbers. Not that the other numbers are not important. Just that these three numbers are what the market seems to react to more commonly.

And as you can see on this monthly S&P 500 candlestick chart. Price has retraced back to the first of these three numbers. So I'll be watching to see what happens at this price, or, also, at the other prices should this first price get violated.

Anyway, I hope you got something out of this post.... What it looks like to me is that the market has been blown up into another bubble, currently is very toppy looking and while I nor anybody else has a crystal ball and can say with certainty what the market is going to do. Nevertheless, all the indications I see tells me the market is in a big bubble and is looking very toppy.

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Reply (SPX): S&P 500 Index (Dec 17th analysis) (Original post)
Iron Condor Dec 2018 OP
Iron Condor Dec 2018 #1
Grumpy Pickle Dec 2018 #2
Iron Condor Dec 2018 #3
uncledad Dec 2018 #4

Response to Iron Condor (Original post)

Mon Dec 17, 2018, 10:22 PM

1. For some more market analysis I would suggest also

The host Greg Hunter of this show is a former CNN and ABC reporter. He is interviewing Michael Pento a professional market analyst who has appeared on market news stations such as CNBC.

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Response to Iron Condor (Original post)

Mon Dec 17, 2018, 11:16 PM

2. Good info.

Thanks for all the work you put into this OP.

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Response to Grumpy Pickle (Reply #2)

Tue Dec 18, 2018, 07:22 AM

3. Thanks Grumpy Pickle

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Response to Iron Condor (Original post)

Tue Dec 18, 2018, 03:16 PM

4. Much appreciated.......

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