As shown in the minute-by-minute intraday chart of the S&P 500 over the last 30 trading days, the index is trading in a nice upward sloping channel. The index broke to intraday rally highs today, but it still closed below these highs. And even though the market is trading well above its 50-day moving average into what many consider an "overbought" level, it's right in the middle of this channel, so it doesn't have rally resistance until it reaches the top of the channel at around 890-900. Conversely, the rally has support along the bottom of the channel, and that level is currently around 850.
You do realize that those "trendlines" are utter nonsense? Firstly, they have no predictive powers and no one can prover otherwise. You're just connecting 2 lows and calling it an uptrend. I can connect random highs and lows and show that the trend is sideways, or the trend is down. Secondly, I can generate a random chart and you can draw those exact channels, but since it's on random data, it wouldn't mean anything. If your technique can't distinguish random data from data it's supposed to predict, that how can it actually predict anything? I've been following this blog for some time and I have lost a lot of respect for you guys because of this article.
Posted by: RandomProfits | April 29, 2009 at 10:20 PM
from what i can glean it's two bearish wedges with the final about to terminate around 885-900. i do not believe this to be an uptrending channel.
Posted by: shortcover | April 30, 2009 at 10:31 AM