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PUBLIC: Pink channel still running the show – Dr. J's Market Thoughts Press "Enter" to skip to content

PUBLIC: Pink channel still running the show

Again, to re-orient those that might not have read the last few months of updates…The white channel is a large channel that has contained prices since February 2016 and we are at the top of the channel.  The pink channel is the channel I identified a few months ago, and it has mostly contained prices and is still doing so.  The orange channel is a fellow blogger’s channel, but price is above that channel a few times and still today.  The blue dashed line is the 50-day moving average and is rising.  The Salmon colored line down by the lower white channel line is the 200-day moving average and it is rising as well.


Okay, now that orientation is done.  The pink channel still rules.  Price bounced strongly near the $265.50 low on Friday.  SPY went ex-dividend on Friday and if you owned it, you received $1.35 per share and will be paid at the end of January 2018.  Price pierced the top of the white channel on Monday at the open and drifted lower all day.  Tuesday was a selling day from the beginning and you can see the decent sized red candle putting price back in the white channel.

At this point, the pink channel rules until proven otherwise.  So the red arrow points to where trouble has to be considered in the short term.  The freen arrow indicates overhead resistance *IF* price pushes above the prices of Monday and Tuesday of this week.  The Tax Reform Plan could very well push prices up and out of the white channel, but watch to see if price pushes through the pink channel as well.  There will be clear sailing UP, UP, and AWAY if we clear $271.50 by the end of the week.  An upside breakout would be a big deal for investors.

If the pink channel breaks to the downside, look for the potential support at the orange channel just above $261 and the 50-day moving average near $260.

2018 is going to be an interesting year in the markets.  Don’t forget to subscribe so you get all the private updates as well.  Merry Christmas everyone!

One Comment

  1. Dr. J
    Dr. J December 26, 2017

    12/26 at almost 12 noon Eastern time and the market is trading heavy, but is receiving support from the pink channel. If price slides below $267 SPY today, and closes down there, consider it a warning shot from the market about the future. Remember, the 50-day moving average is down near $261, so there could be quite an “air pocket” if we lose the pink channel support. Happy Holidays everyone. I will have the normal month end write up done over the weekend since the end of the month/year falls on Friday of this week and the market will not open until a week from now on 1/2/18.

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