SPX breaks below Tuesday's low
S&P 500 Index (SPX) Technical Analysis Report for Oct 21, 2020 | by Techniquant Editorial Team
SPX ended Wednesday at 3435.56 edging lower $7.56 (-0.22%). Trading $24.95 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on October 16th, SPX lost -1.63% on the following trading day. Closing below Tuesday's low at 3435.65, the S&P confirmed its breakout through the prior session low after trading up to $2.59 below it intraday.
Daily Candlestick Chart (SPX as at Oct 21, 2020):
Wednesday's trading range has been $31.80 (0.92%), that's below the last trading month's daily average range of $45.72. 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.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Prices are trading close to the key technical support level at 3431.56 (S1). After having been unable to move lower than 3435.65 in the previous session, the index found buyers again around the same price level today at 3433.06.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 3419.93 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for S&P 500. Out of 422 times, SPX closed higher 59.00% 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 64.93% with an average market move of 0.46%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are FTSE losing -1.91% and DAX closing -1.41% lower. On the flipside the best performers have been HSI closing 0.75% higher and NKY gaining 0.31%. Read more