The S&P 500 sank to new 2020 intraday lows yesterday, but staged a recovery in the closing hours. That’s what has happened in both preceding sessions. Will the gains finally stick one of these days?
Let’s dive into the daily chart (chart courtesy of
https://stockcharts.com).
One day up, the other day down. Wash, rinse, repeat. But the pattern of three consecutive rallies into the session close looks encouraging. While the pace of declines has moderated, the sizable intraday
volatility remains.
These were our
yesterday’s notes about the daily indicators:
(…) they’re refusing to budge much lower with each daily slide (that speaks to prices being overextended to the downside), and Stochastics has even flashed its buy signal. While the signal came in its oversold area and thus is not as reliable as the one generated outside this range, it’s still notable.
It’s true that Stochastics’ buy signal has been invalidated yesterday as prices slid below 2280. But we’ve seen another overnight rally above 2400. And at the moment of writing these words, stock futures are trading at around 2370. We also also count on intraday volatility approximately in line with yesterday’s figures. One more thing though before summarizing.
Let’s recall our points regarding the medium-term picture, as our
yesterday’s observations are still valid today:
(…) While the week is far from over, the price action smacks of a reversal in the making. Accounting for yesterday’s session , the volume appears on track to beat last week’s one. Should weekly closing prices stick around this level, that would support the likelihood of a turnaround. But what kind of a turnaround? It’s our opinion that this would most likely mark a temporary respite only.
As you could have sensed already, we went long earlier today, and great news in the making! As the S&P 500 trades at around 2455 when you are reading this article,
our open position is around 85 points in the black already!
Summing up, while the bears have the upper hand, the potential for an upswing hasn’t decreased since yesterday. And we plan to take advantage of it. This is primarily supported by the daily indicators’ posture. Covering our short-term game plan, the trading position details are reserved for our subscribers.
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Thank you.
Monica Kingsley
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care