Back on November 15th, I drew some trendlines on a SPY chart. Despite my leanings towards quantifiable trading, I still believe in the power of the trendline. I checked these pre-drawn trendlines this evening. You can see below that recent action has brought the SPY to close at two areas of resistance.
We have had above average volume on this recent surge, and we have positive seasonality in play. Still, I expect resistance here, if only for a couple of days.
What we want to see is SPY clear resistance, definitively. Should this happen, the indices may be off to the races.
It is increasingly looking like the we may have a strong bull run through the year end. Of course Europe may throw a wrench in things. But technically speaking, the market is attempting to shrug off the European debt issues.
If you follow the horizontal trendline backwards, you see it originates as support before the 2008 market meltdown. When the market broke through this level, the Armageddon trade ensued. If the market can overcome this resistance, I see it as a very bullish development as it represents recovery from the monumental declines of September and October of 2008.
Ever though about doing some linear regression to quantify trendlines?
Wood,
need some help, how do you take the amibroker backtest output and then draw those chart which show monthly performance. I have amibroker standard version.
thanks
Bill