SPX runs into sellers around 3380.69 for the third day in a row
S&P 500 Index (SPX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
SPX finished the week 1.58% higher at 3380.16 after gaining $6.22 (0.18%) today ahead of tomorrow's Presidents' Day market holiday. Today's close at 3380.16 marks the highest recorded closing price ever. Trading up to $11.93 lower after the open, the S&P managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on February 6th, SPX actually lost -0.54% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SPX as at Feb 14, 2020):
Friday's trading range has been $14.54 (0.43%), that's below the last trading month's daily average range of $26.59. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SPX. Prices continued to consolidate within a tight trading range between 3360.52 and 3385.09 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
Prices are trading close to the key technical resistance level at 3385.09 (R1). The market ran into sellers again today around 3380.69 for the third trading day in a row after having found sellers at 3385.09 in the previous session and at 3381.47 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 3385.09 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 3360.52 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for S&P 500. Out of 128 times, SPX closed higher 61.72% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 67.97% with an average market move of 0.36%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are NKY losing -0.59% and FTSE closing -0.58% lower. On the flipside the best performers have been HSI closing 0.31% higher and NDX gaining 0.29%. Read more