News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/mAKl7spDmH
  • Wall Street Futures Update: Dow Jones (+0.513%) S&P 500 (+0.628%) Nasdaq 100 (+0.755%) [delayed] -BBG
  • Net exports were the biggest drag on Australia's GDP in over 9 years in Q3, according to data released today. #RBA on tap today, full Q3 #GDP report due Wednesday
  • 🇦🇺 Building Permits MoM Prel (OCT) Actual: 3.8% Expected: -3% Previous: 16.2% https://www.dailyfx.com/economic-calendar#2020-12-01
  • 🇦🇺 Building Permits MoM Prel (OCT) Actual: 3.8% Expected: -3% Previous: 15.4% https://www.dailyfx.com/economic-calendar#2020-12-01
  • 🇰🇷 Markit Manufacturing PMI (NOV) Actual: 52.9 Previous: 51.2 https://www.dailyfx.com/economic-calendar#2020-12-01
  • 🇦🇺 Building Permits MoM Prel (OCT) Actual: 3.8 Expected: -3% Previous: 15.4% https://www.dailyfx.com/economic-calendar#2020-12-01
  • What are some technical and fundamental factors affecting the equities market? Get your free forecast here:https://t.co/YQG1aaIT8C https://t.co/uwPieXfpHf
  • Heads Up:🇰🇷 Markit Manufacturing PMI (NOV) due at 00:30 GMT (15min) Previous: 51.2 https://www.dailyfx.com/economic-calendar#2020-12-01
  • Heads Up:🇦🇺 Building Permits MoM Prel (OCT) due at 00:30 GMT (15min) Expected: -3% Previous: 15.4% https://www.dailyfx.com/economic-calendar#2020-12-01
S&P 500 - Swings Offering Trades, 'Shape-shifting' Continues

S&P 500 - Swings Offering Trades, 'Shape-shifting' Continues

2016-04-11 11:07:00
Paul Robinson, Strategist
Share:

What’s inside:

  • Market not offering up swing trades, it’s a ‘hit-and-run’ market for now
  • Shapes, shapes, and more shapes
  • Continuing to lean short, 2040 holds the key

Market not offering up swing trades, it’s a ‘hit-and-run’ market

On Friday, the S&P 500 traded back inside the triggered H&S formation, which given the swings since Thursday is not really looking like an H&S anymore. The once clean pattern is quickly ‘shape-shifting’ into other configurations. We have been noting that the current swings in the market aren’t offering up the type of set-ups which present good multi-day holds, but are still tradeable with 1 to 2 days in mind. You could be holding a long or a short position from two weeks ago and either position would be about equally right or wrong in terms of P&L. It’s a ‘hit-and-run’ type of market right now.

On Friday, shortly into the US session the S&P found resistance at the upper parallel at 2061, offering up a solid spot to initiate a short position before shoving lower and testing a critical swing point carved out in the low 2040s. This area just above 2040 counted as our ‘neck-line’ of the H&S topping pattern we were previously honed in on. It’s an important area given the number of inflection points seen since the beginning of the month; counting Friday afternoon there have been three more attempts to break, making six total attempts since April 1 which have failed to lead to down-side momentum. The lone exception was a break on Thursday, but that was quickly reversed.

Shapes, shapes, and more shapes

If you take out the Thursday dip beneath 2040 you have a ‘descending wedge’ developing. We also have a descending channel in place as long as the upper parallel (top of ‘wedge’) continues to act as resistance. With either configuration, the bottom-line at this time is lower highs continue to form, which should be bearish in the short-term.

S&P 500 Hourly

S&P 500 - Swings Offering Trades, 'Shape-shifting' Continues

Continuing to lean short, 2040 holds the key

We suspect on another break below 2040 the market is unlikely to bounce back above any time real soon given the developing down-trend off the April 4 high is becoming increasingly visible and the numerous attempts to hold 2040. Further weakness below noted support brings the Thursday low at 2033 into focus, then the lower parallel and horizontal price support around 2028, 2021ish, then the major zone of support between 1990 and 2010.

What will undermine the bearish bias is pretty much the obvious – continued holding of 2040 and subsequent break above the upper parallel which currently comes in under 2060 (and declining). A break above the previously identified ‘right shoulder’ at 2069 takes the current topping structure off the table and likely paves the way to 2079 (4/4 high) and higher.

As we said on Friday, the possibility of a ‘bull-flag’/ channel still exists, but we will need to see the S&P move sideways to down a bit more before carving out a better looking pattern. So, even if the next swing of significance is higher from a ‘bull-flag’ formation, the near-term picture is still tilted more bearish than bullish, especially with the sequence of lower highs and lows in place. Even with a developed bull-flag, the proximity to major overhead resistance between ~2080/2115 gives pause to the notion of a buying a bull-flag breakout. More on this later if it becomes relevant.

Daily

S&P 500 - Swings Offering Trades, 'Shape-shifting' Continues

For now, we will continue to operate within the confines of the channel off the April 4 high with full respect to the importance of 2040, and also continue to ride our 'one-day at a time' mentality. Good trades are there, just need to play the levels and keep hold time times short.

For tips on how to take your trading to the next level, check out our guide – “Traits of Successful Traders”.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter @PaulRobinsonFX, or email him directly at instructor@dailyfx.com.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES