SPX closes above its opening price after recovering from early selling pressure
S&P 500 Index (SPX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SPX ended the month 5.51% higher at 3271.12 after gaining $24.90 (0.77%) today. Trading up to $50.19 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (SPX as at Jul 31, 2020):
Friday's trading range has been $51.91 (1.59%), that's above the last trading month's daily average range of $41.98. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SPX.
Four candlestick patterns are matching today's price action, the Dragonfly Doji which is known as bullish pattern, two bearish patterns, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Hanging Man showed up on April 16th, SPX actually gained 2.68% on the following trading day.
After trading down to 3220.26 earlier during the day, the index bounced off the key technical support level at 3223.27 (S1). The failure to close below the support might increase that levels significance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for S&P 500. Out of 363 times, SPX closed higher 62.53% 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 67.77% with an average market move of 0.61%.
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 -2.82% and FTSE closing -1.54% lower. On the flipside the best performers have been NDX closing 1.78% higher and DJIA gaining 0.44%. Read more