Equities Markets are Charting Like They May Bounce Higher

Tom Gentile

Posted in Daily Report

By: Tom Gentile on June 23rd, 2022 • 2 mins read

Don’t look now, but the equities markets are charting like they may bounce higher from here.

We have a 3-period pivot low in the SPY. A pivot low is where you are looking a three periods, (our charts are usually day charts, so each OHLC (Open, High, Close, Low) bar or candlestick is for one – day.

A pivot low is where you have a bar or candle sandwiched between a bar or candle to the left and the right of it with higher lows than the one in the middle.

Figure 1: SPY 100-day Chart showing example of a Pivot Low
Figure 1: SPY 100-day Chart showing example of a Pivot Low

This may be a place where the market has found a temporary bottom and bounces higher from. It could be a situation that’s called a Bear Trap where one thinks the markets have found a bottom. People start buying or going long call options only to see the markets reverse back to the downtrend and maybe even take out the pivot low and drop further.

The other day we posted an educational piece to you all about Target Shooting.

Looking for a stock that is trading down and assessing or putting in some cross hairs on the chart as to where the stock may trade to and find support from going any lower for the time being and maybe even bouncing from.

Here is a situation where we are looking at our Highest Option Volume list.

Highest Option Volume list Example
Highest Option Volume list

It shows Alcoa, (NYSE: AA) 

When one looks at the chart on AA one can see it is hitting the crosshairs of a price that may be old resistance / new support. Or one can say that support 45 has been in awhile and it is there again now.

Alcoa, (NYSE: AA) 
Alcoa, (NYSE: AA) 

Caution if one is considering a call option on this now as there is that ‘PUT’ option activity  from the Morning Report list.

Maybe once we see AA come off that list we can re assess the chart and see if it is worthy of trading for a bounce. Of course, we advocate confirming with your broker if that seems the prudent move for your portfolio.

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.