Stocks Could Be Preparing for a Big Move
September’s been a pretty quiet month so far, despite its reputation for volatility. However, prices might be gearing for a bigger move relatively soon.
The first pattern on today’s chart of the
SPX S&P 500 index is Wilder’s Relative Strength Index (RSI). The oscillator has been sitting little changed around the midpoint of 50 for the last week. It’s neither overbought nor oversold. Readings like this are unusual. Will traders pile in on either side once a move begins?
Next, the index is in the midst of forming a second consecutive inside week. That also highlights the narrowing of price action.
Third, consider the rally from the low of August 14 to the high of September 1. SPX has held a 50 percent retracement of that move, which may bolster the case for an upward trend.
Another potentially bullish signal is the relationship between the 8-day and 21-day exponential moving averages (EMAs). The faster EMA crossed above the slower EMA almost two weeks ago and has remained there since.
These points could be important heading into next week’s Federal Reserve meeting.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart of the
SPX S&P 500 index is Wilder’s Relative Strength Index (RSI). The oscillator has been sitting little changed around the midpoint of 50 for the last week. It’s neither overbought nor oversold. Readings like this are unusual. Will traders pile in on either side once a move begins?Next, the index is in the midst of forming a second consecutive inside week. That also highlights the narrowing of price action.
Third, consider the rally from the low of August 14 to the high of September 1. SPX has held a 50 percent retracement of that move, which may bolster the case for an upward trend.
Another potentially bullish signal is the relationship between the 8-day and 21-day exponential moving averages (EMAs). The faster EMA crossed above the slower EMA almost two weeks ago and has remained there since.
These points could be important heading into next week’s Federal Reserve meeting.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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