SPX slumps -1.63% closing $56.89 lower
S&P 500 Index (SPX) Technical Analysis Report for Oct 19, 2020 | by Techniquant Editorial Team
SPX finished Monday at 3426.92 tanking $56.89 (-1.63%). This is the biggest single-day loss in over three weeks. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 3480.45, the market confirmed its breakout through the prior session low after trading up to $60.52 below it intraday.
Daily Candlestick Chart (SPX as at Oct 19, 2020):
Monday's trading range has been $82.49 (2.36%), that's far above the last trading month's daily average range of $49.08. 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 higher than usual for SPX.
In spite of a strong opening the index closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on October 6th, SPX actually gained 1.74% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 3431.56 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for S&P 500. Out of 245 times, SPX closed higher 61.22% 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 66.94% with an average market move of 0.85%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are NDX losing -1.84% and DJIA closing -1.44% lower. On the flipside the best performers have been NKY closing 1.11% higher and HSI gaining 0.64%. Read more