SPX closes lower for the 2nd day in a row
S&P 500 Index (SPX) Technical Analysis Report for Sep 17, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SPX finished Thursday at 3357.01 losing $28.48 (-0.84%). Trading up to $18.04 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on September 1st, SPX gained 1.54% on the following trading day. 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 Sep 17, 2020):
Thursday's trading range has been $46.35 (1.38%), that's slightly below the last trading month's daily average range of $49.38. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SPX.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading as low as 3328.82 during the day, the market found support at the 50-day moving average at 3339.61. Unable to break through the key technical resistance level at 3361.64 (R1), the index closed below it after spiking up to 3375.17 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
Though the S&P is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 3310.47 where further sell stops could get triggered. Further selling might move prices lower should the market test August's nearby low at 3284.53.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Down" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for S&P 500. Out of 71 times, SPX closed higher 67.61% 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 66.20% with an average market move of 0.10%.
With six out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are HSI losing -1.56% and NDX closing -1.48% lower. None of the markets managed to end the day in the green. Read more