Today is Fed Day! Hooray! 🙄
(1) I’ve mentioned in the past how the 8 SMA can not only be used for identifying trend (upward or downward sloping) and trade location (long at rising lower band, short at declining upper band) but it can also be used for timing purposes. See SPX example below.
If SPX is unable to take out yesterday’s 4394.87 high OR if it moves above that level and then reverses back below, that would be good location for a short. Absent a bearish reversal, above yesterday’s high is confirming a 3-candle bullish 2d-1-2u reversal.
(2) NFLX is showing great strength this morning! I’m not adding long Deltas right now because price needs to close the day above the declining upper band for the bullish reversal to hold. I have no reason to think it won’t hold but with price already up over 3% today I’d rather wait to see what happens than chase it here. If price takes out last week’s 598.57 high then the weekly candle will be a very bullish 3u (lower low, higher high).
(3) SPY opened right near last month’s high and immediately rallied. That’s bullish. What would look bearish? If price dropped back below the 436.05 opening price because that in itself can be used as a bull/bear line (moderately important) but that would also be a failed breakout above last month’s 436.10 low (more important).
(4) Below is the SPX chart for today. The daily candle closed 2u (2-up) which means today’s candle had both a higher low and a higher high than yesterday’s candle. That’s typically bullish however there are nuances to candle analysis that require some additional interpretation. In this case the upper wick of the candle was relatively long indicating price finished well off the high of the day? Bearish? Not really unless today’s high is untouched in tomorrow’s trading. That would represent at least a partial failure by the bulls to maintain upward momentum in price. A complete failure by the bulls tomorrow would be if price makes a lower high and a lower low than today. That would result in a 2d daily candle which would complete a bearish 2u-2d reversal. All of today’s price action remained below last week’s low and if price drops below 4367 tomorrow then price will be below the prior day’s, week’s and month’s low. That doesn’t sound very bullish, does it?
