Posted in
Technical Analysis
By: Tom Gentile
on September 1st, 2022
The precious 4-trading days have not been kind to the bulls. Today, was a bullish reversal day in which the daily price action on the Dow, NADASQ and S&P closed higher than their open. That is considered a bullish day.
The short-term trend prior to today on the SPY has not been bullish, The SPY rolled over from their August peak, but today’s bullish reversal day looks interesting.
Price Action that is Deemed Bullish
Whether or not a day is a bullish reversal day, or it was bullish from the open when a security closes at or near its high of the day that is also a bullish sign.
It shows the bulls were actively buying into the close for the day vs selling off at the end.
When a security closes at or near its high of the day it may lead to a continuation of that bullishness for the open the next day.
It does not guarantee it as any number of things can happened overnight to disrupt the markets, but if there isn’t any news to shake things up the markets could maybe gap up or at least open and run a bit higher.
Has the Stick Market Slide from the August High Ended?
The markets still are in an overall bearish way despite the rally off the June lows.
Technically, the bullish reversal day today is happen at a price area where one might say was a previous resistance area at $390.
It is interesting in that the slide has stopped at least for a day back down here at $390.
No one has a crystal ball and can predict what will happen, but this bullish reversal day at this old resistance area could speak for it becoming a new support price area.
Is one is going to consider a bullish option trade maybe consider this $390 price are as a place to consider a technical stop. Meaning, if the markets break below this support it may be time to stop out of a fresh bullish option trade and lean bearish again.
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