Tackle Today: We’re Testing the 20-day Moving Average
September 12, 2022
«Here’s what it means.»
Traders,
The market is greeting us with an up gap this morning to the tune of 0.5% for the S&P 500. The gains come following three consecutive up days and set us up for the potential of a fourth. But there’s one thing catching my eye that threatens bulls’ chances.
The declining 20-day moving average.
Bears are known to gather at key moving averages like this one. Their collective attack frequently causes resistance to form around the 20-day (and 50-day, 200-day, etc.…). And that makes today’s jump an interesting one to watch. Fail here, and it’s textbook downtrend behavior. SPY would create a lower pivot high and keep the downtrend intact.
But if we can hold the gap and see upside follow-through, it would be one more piece of evidence suggesting this rally is a game changer- more than a garden-variety bear retracement.
Video of the Day: Trading Concept Check: Simple vs Exponential Moving Averages
Knowing the difference between the two is important when laying out price studies on your charts.
Chart of the Day: S&P 500 ($SPY)
Can we pierce the 20-day?
Today’s line up
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