The price action and charts that the bulls are clinging to

Welcome back! As we kick off this weekend, certainly this is what the bulls are looking at. This weekly chart had a massive accumulation bar. The market settled back down and then we had another accumulation bar. That set us off at another attempt to break the highs. Right now, if you’re bullish, you’re hoping that this accumulation bar is going to hold and we do not break below the low of that bar. You want to have it settle into the area or outright shoot back up to the upside. That’s the weekly chart and what the bulls are clinging on to there.

On the daily charts, we did lock in accumulation bars at major support levels. The Russell and the Dax are holding out. On the Dow and the S&P, we’re holding the 200 day moving averages and locked in accumulation bars as of yesterday. It brought us right back up to a theme you’ve heard me talk about month after month. We’re back in the channel on the Nasdaq and the Dow. We’re still below the channel on the Russell because it’s been the weakest but we’re back in the channel on the S&P. Right now, you’re looking at a couple of things. You want to hold those accumulation bars on the various charts. Also, you want to stay above the bottom end of these channels. The next step is to get above the top of the channel. We’re looking for continuation and make another attempt at those areas. Obviously, we have a lot holding over our heads right now with domestic and foreign affairs. There’s a lot going on in the world. It all circles around that Dow 27,000 level. We have been making higher lows. Note that we just held that this week. If you’re bullish, you want to see us break back up above 27,000 and this time, 27,300 or 27,400. That’s what you’re really looking to get above. If you’re bearish, you want to break this trend line, which can lead to many thousands of points deeper cut. If you’re short, the pain point for you is this 26,500 area down to around the 25,700 area. This accumulation is an area where the market is stopping the blood letting. It did it multiple times in the same area. This is a huge area of support. If you’re trying to short, you’re trying to short very aggressively because this area isn’t proven to break. This market is clearly holding on very well for the bulls, which they’re very happy about.

In the meantime, some of these stocks like the Home Depot and Walmart are up a little today. I told you the other day, we’d be looking at those for long-side trades if this market were to hold the channel, which it did. That’s why the market is pushing up. It’s an individual stock pickers market. Watch your earnings announcement. It’s amazing how many people are getting into trades on individual stocks right before an earnings announcement because they’re not cognizant of that. Make sure you check your favorite options sites for earnings announcements. If you don’t have a tool for that, we will soon. Stay tuned for that.

Have a phenomenal weekend. Watch those breakout/breakdown levels. We have a lot of great trading coming up in the next few months and into the election year. What a great time to be a trader. Thanks for being with us and looking forward to some great things in the days and weeks to come.

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