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PUBLIC: Back at the bottom+UPDATE

UPDATE from 12/6/17 after the close is below the original post…be sure to jump down

The pink channel still rules!  Price has dropped to the bottom.  I tried to “buy the dip” today at SPY $263 going into the close, but it never got that low.  I’ll look at things tomorrow and see if this channel is still holding up.

For reference, the next upper price to watch would be the top of the pink channel if price moves up.  The next lower price to watch is Friday’s low near $260.75, then the 50-day moving average near $257.  Watch the pink channel–it has ruled price for months now!

 

UPDATE from 12/6/17 after the close:

[Important announcement:  in an effort to improve this site for my followers, I would like to point out that you may now right click a chart and ask it to open in another window or tab so you can have the chart open while reading the commentary.  The chart should be much clearer!  Give it a try!  Don’t forget you can also ask the website to notify you via e-mail any time a new post is put up.  Dr. J ]

One of the bloggers I read (I did not say he was always right or someone I believe is a trader to follow…just a blogger I read) had an alternative channel drawn on his chart.  Oscar Carboni (you can find him on YouTube) is an interesting character to say the least, but he has a channel fabricated from the futures chart of this product (ES).  I have drawn his channel in dark orange and my original channel remains in pink.  His channel is drawn off the bottom touches with a parallel line above (and price exceeded his channel recently to go tag the larger white channel I’ve drawn from the Feb 2016 low).  My pink channel was violated to the downside, but was built from the top of prices and a parallel line drawn below.  Both have issues, but the pink channel has more TOUCHES than the orange channel.  Neither can be consider right or wrong, they are just drawn from different perspectives, and I’d like to share the alternative perspective with my readers.

That being said…if the orange channel sees another touch of the lower boundary, traders need to watch the $259-$259.50 level this week on Thursday and Friday.  For that channel to remain something important, price shouldn’t CLOSE below those levels this week.  Note the rising 50-day moving average is also in this area just below the orange channel just under $258.  Bottom line for short term traders–there is plenty of support between our current $263.24 close on Wednesday and $257.  It is going to take a “news event” to drive price lower than $257 this week in my humble opinion.  There are certainly opportunities for that news to occur, so that support is not impenetrable.

Here’s the daily chart with the same white, pink and now orange channels visible for you to see for reference.  I have added orange arrows to point out the orange channel that is new to the chart as of today.  As always, the blue line is the 50-day and the salmon line near $246 is the 200-day.  Hope this helps some of you short term traders.

  1. Dr. J
    Dr. J December 7, 2017

    Comment from after the close on 12/7:
    The pink channel held up again as a lower boundary for price. The top of the pink channel is between $267 and $268. The white channel is actually below the pink channel now (that has contained prices since the Feb 2016 low) so tagging $267 would be a really big deal because the last time we broke above that white channel on Monday, price got rejected back inside within the first hour of trading. The top of the orange channel is just above $265 on Friday.

    A good NFP (non-farm payroll) employment number tomorrow has the ability to propel us up to those levels, and possibly beyond. A poor one could break the pink channel to the downside and we’d have to look for support from the Friday low of 12/1 on the Flynn news, the orange channel, and the 50-day moving average. Friday’s opening should be an interesting one if nothing else!

    • Dr. J
      Dr. J December 8, 2017

      They gapped it up by a dollar on the SPY on Friday and price is hovering in a relatively tight range. Buyers and sellers are duking it out trying to make pennies on each move. We haven’t broken the pink channel to the downside, we haven’t broken the orange channel to the upside. Just sitting in neutral for now. TGIF.

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