Corey Rosenbloom: What is the main chart pattern – and key levels – to monitor (and plan trades) on the S&P 500 (INDEXSP:.INX) and Dow Jones Industrial Average (INDEXDJX:.DJI) charts?
Let’s take a look at the dominant range trendlines which provide a clear roadmap for planning the short-term future.
We’ll start with the S&P 500:
We’ll just focus our attention here on the yellow highlighted rising range pattern which serves as both a roadmap and magnet.
Imagine the midpoint of the pattern – currently near 1,885 – as a Magnet that pulled price back toward it on each upswing and downswing as price played ping-pong within the range.
While this appears on the chart as a rising trend, it’s perhaps best defined as a rising rectangle or rising range pattern.
Notice also how price (buyers) rallied up off the rising 50 day EMA (blue) on all occasions except February and April’s breaks.
Recently, we’ve seen five instances where buyers have flooded into the market exactly at the rising 50 EMA (mostly in May).