«Here’s what it means.»
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
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Tackle 25 MasterMind Group 7:00 PM EST
PRO Members are invited to join and learn how to better use the Covered Call System using the Tackle 25 stock list with an expert coach.
Watch the Stock, Options, Commodity, and Forex Reports to help you prepare for the week.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.