S&P Bearish Volume Edition

16 เม.ย. 2020

The volume situation on the S&P continues to look bearish. The chart pattern is a rising wedge and we have falling volume as we go deeper into the wedge. The On Balance Volume has the OBV, the 10 and 20 EMAs underneath the 100, which is as about as bearish as one could need if one wanted confirmation. The horizontal line on the OBV shows a technical top on a indicator while the price action is rising, which counts as bearish divergence in my book.
If price action gets full performance on the wedge we will see a double bottom at about $2190. If we look at this formation as a flag pole and bearish pennant then we are looking closer to $1600. Flag poles are not the best formations to reach target. Wedges can fail in themselves.
The weekly chart on SPY looks even more bearish, with the OBV consolidating below the 100 EMA and the drop in volume highly visible. If we look at the SPX Index we see the same drop in volume but the OBV situation is different as the OBV is "merely" under the 10 and 20 EMAS.
The Volume profile in the chart below has been set to the begining of the uptrend in 2008 when the S&P bottomed out at... ahem... $666. We see that the price action went edge to edge on the Value area before bouncing. There is a high volume node at about 2100 and a lower high volume dode at about 1400, which suggest eventual over-performance of the flagpole formation.
Now the situation on SPY looks even worse. I am not sure which chart we should be watching for volume profile target setting so I am going to be watching both, but damn, this chart is filled with brutality and pain for bulls, as well as those that need to retire soon, and the rest of Wall street.

17 เม.ย. 2020

บันทึกช่วยจำ

I deleted the wedge and just left the rising support that the price action slipped. It is now acting as resistance and it can act as such for another couple hundred dollars.


As a wider view we can see that these two trend lines intersect at 3000 and so we could expect a lot of resistance at those intersections as the trend lines really assert themselves as resistnace and the large round number psychology comes into play.