Really, no one can say what the S&P is going to do now or in the next coming weeks but what we do know is that it is setup for something to happen. Adam Hewison of Market Club has a new free video where he explains some of the technicals we are seeing now in the S&P from which we can decipher some key levels that if broken can decide the direction of the index.
From an educational side of things, there are some important things to notice in how Adam approached his analysis.
Firstly, using a daily chart of the S&P 500, Adam looks at the big picture going back a year or more.
Secondly, He looks at where price came from. In doing such, you identify key turning points, and support and resistance levels.
Thirdly, he uses fibonacci retracement. Now everyone dont draw fibs the same way but when it's obvious where the highs and lows are, rest assure everyone is thinking and seeing the same thing. Thus it becomes a "self fulfilling prophecy" and the levels seems to be good.
Fourthly, He uses a momentum indicator (MACD) and explains what he is seeing. He noted that the indicator has been losing momentum. History teaches us that price usually (not all the time) follow momentum.
Fifthly, He recognizes that price has been ranging or trading sideways for the past few weeks. It's always important to know if price is ranging or trending in order to determine the strategy you will use to trade the market.
So watch the video to get an in depth explanation of Adam's analysis.
Click Here to see the video and Enjoy.
:)
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