Monday, July 1, 2013

Just a plain ole PnF chart

I'm a bit strapped for time today so no witty commentary or any psychological insights into why you are all terrible traders.  Just plain ole' analysis.  

I took a snapshot of a 30min PnF chart intraday to highlight some key support and resistance levels.  Notice the resistance level of 1626.4 and support of 1596.4. There was also the 50dma at 1622.99 to contend with and the 20dma at 1617.7.  Price closed below all of these levels today after challenging them on low volume. 

The SPX daily candlestick chart below has overlaid the support and resistance levels labeled from above as well as the 50dma and 20dma.  You will notice that volume has dropped off considerable today as we hit this array of resistance areas.  The volume was the clue that resistance was most likely going to hold since it was clearly signaling a lack of demand at these levels.  In order for resistance to be broken we need demand to overcome supply.  Price and volume were signaling otherwise.  So far my master plan of a retest of the high volume area around 1578 and 1594 (and yes I realize that the PnF chart is showing 1596.4 as support this is due to volatility) is still in place.  That does not mean that we can't just rocket higher from here but I'm looking at this move from a probability stand point and the retest path seems most likely. 

Thanks for reading. 


No comments:

Post a Comment