By: Tom Gentile
on July 20th, 2022
One day the market looks like it is going to continue its bearish slide its been in for the year and other days it looks like the bulls are going to recover.
Today was the latter.
The equities market, as represented by the chart on SPY, which is a tracking etf of the S&P 500 Index, gapped higher from the previous days close.
It was close to creating what the Japanese Candlestick traders would call a Marubozu Candle. Marubozu means shaved head or bald head.
The candle looks like a block as there is typically no upper or lower shadow on the period candle one is viewing, (the period we are using is a day period). This is a sign of strength in that the stock opened at one price and the bulls pretty much took control of pricing and traded it higher all day and even in to the close where it didn’t (or hardly sold off).
Today’s day wasn’t technically a Marubozu day as there was a nit of a shadow below the candle body, but it was still a bullish day for SPY.
Close above 390 Resistance on SPY
The horizontal green line on the chart image above shows where 390 acted as both support back in May of this year and as resistance, up until today.
Today it closed above 390, which is a potentially bullish indication there isn’t or wasn’t as much selling at 390 as there had been previously.
This doesn’t guarantee it will trade higher, but it is an encouraging sign for bulls.
It may either take off again tomorrow or watch for a bit of consolidation for a couple of days or so at 390. If no sellers step in and market makers find more buyers at slightly higher prices it may push this security higher.
One can either trade SPY itself or look for stock securities that make up the holdings of this ETF for buying opportunities.
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