Monthly Archives: March 2016

Bearish Stochastic Signal on the S&P 500 Chart

I have been highlighting the stochastic oscillator on the S&P 500 index for the last six months, and it has been accurately signaling short term market reversals. A bullish signal occurs when the oscillator makes a positive crossover in an oversold condition and then moves up and out of the oversold zone; a bearish signal occurs when the oscillator makes a negative crossover in an overbought condition and then moves down and below the overbought zone. There have been ten signals since October 2015, five bullish and five bearish. The most recent, a bearish signal came yesterday as the oscillator moved out of an overbought condition for the first time in five weeks.


Tesla at Key Resistance Level

The technical picture on the Tesla (TSLA) weekly chart is bullish. Momentum indicators are headed higher, money flow is turning positive, and the stock price has been moving higher for the last month. It has, however, entered an important zone of resistance, near the flat 40 week (200 day) moving average and the highs made at the end of last year.

100001. TSLAweekly

A hammer candle formed last week within the resistance zone, and this reflects positive price action. But follow-through price action is required to sustain the short-term bullish trend or the stock runs the risk of a pullback that could take it back down to the channel low, and require several months of consolidation and base building before another run at resistance.

Emerging Markets Showing Real Signs of a Reversal in Trend

A large bullish engulfing candle has formed on the iShares Emerging Markets ETF (EEM) daily chart and encompasses the overall ranges of the previous eight candles. Recent price action has already taken out a long term downtrend line and a move back above the declining 200 day moving average would have intermediate term implications for the lagging market.

99647. EEm chart