SPX dominated by bears dragging the market lower throughout the day
S&P 500 Index (SPX) Technical Analysis Report for Nov 20, 2020 | by Techniquant Editorial Team
SPX ended the week -0.77% lower at 3557.54 after losing $24.33 (-0.68%) today. The bears were in full control today, moving the market lower throughout the whole session. 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 Nov 20, 2020):
Friday's trading range has been $24.38 (0.68%), that's far below the last trading month's daily average range of $51.41. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SPX.
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, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on October 27th, SPX lost -3.53% on the following trading day.
Unable to break through the key technical resistance level at 3581.16 (R1), the stock index closed below it after spiking up to 3581.23 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move above 3585.22 in the previous session, the S&P ran into sellers again around the same price level today, missing to move higher than 3581.23.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 3543.84 where further sell stops might get activated. With prices trading close to this year's high at 3645.99, upside momentum could speed up should S&P 500 be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for S&P 500. Out of 329 times, SPX closed higher 58.66% 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 65.35% with an average market move of 0.74%.
With three of the other Major World Indices closing higher and three closing lower today, the winners of the day are DAX surging 0.39% and HSI gaining 0.36%. On the flipside the worst performers have been DJIA closing -0.75% lower and NDX losing -0.66%. Read more