thechartpatterntrader
New member
I really appreciate the warm greeting I recieved from Tom, and moderators Show-me & nnuut. Thank you for being so thoughtful.
The S&P 500 pulled back today in what appears to be a backtest to the upper boundary of a bullish Flag pattern. The Flag slopes moderately against the previous trend, which suggests a extension of the previous trend. Prior to the breakout of this continuation pattern, the S&P 500 broke its rising Intermediate trendline. Once that happens either a reversal occurs or a period of consolidation takes place, which often forms a continuation pattern. It is obvious that the latter occurred.
Recently, that continuation pattern broke out, and now a few things should occur. First, support of the previous minor low should hold up, a new minor trend should clearly emerge and push prices higher, the 20 & 50 day moving averages should continue to advance. Look for higher highs and higher lows to form, this is normal trend development. If these traits fail to occur, then that would present an opportunity for sellers to take control of the market again.
We may get a push higher for the short term but the weekly charts continue to be quite overextended and eventually a reversal will happen giving birth to an Intermediate corrective phase.
Study the chart below to help you gain clear perspective as to what is currently taking place on the S&P 500.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p96216582542&a=112452373
The best of trades,
The Chart Pattern Trader
The S&P 500 pulled back today in what appears to be a backtest to the upper boundary of a bullish Flag pattern. The Flag slopes moderately against the previous trend, which suggests a extension of the previous trend. Prior to the breakout of this continuation pattern, the S&P 500 broke its rising Intermediate trendline. Once that happens either a reversal occurs or a period of consolidation takes place, which often forms a continuation pattern. It is obvious that the latter occurred.
Recently, that continuation pattern broke out, and now a few things should occur. First, support of the previous minor low should hold up, a new minor trend should clearly emerge and push prices higher, the 20 & 50 day moving averages should continue to advance. Look for higher highs and higher lows to form, this is normal trend development. If these traits fail to occur, then that would present an opportunity for sellers to take control of the market again.
We may get a push higher for the short term but the weekly charts continue to be quite overextended and eventually a reversal will happen giving birth to an Intermediate corrective phase.
Study the chart below to help you gain clear perspective as to what is currently taking place on the S&P 500.
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p96216582542&a=112452373
The best of trades,
The Chart Pattern Trader
