Today’s stock market is in an uptrend on both monthly and weekly charts. The monthly chart is the first chart in this post. It is showing the last three years of price data for 2014, 2015 and 2016. You can see that the market held its support level at 180 for the SPY ETF (S&P500) even though the price came down and tested the 180 level three times during 2014, ’15 and ’16 (the black line). Since February 2016 the stock market trend has been upwards as illustrated by the pink arrow.
This weekly chart is showing the strong uptrend the market has been in since just before Election Day. The news people have been talking about the stock market’s move higher since the election, but on the Monday before the election, it had already begun this significant up move. I have drawn a green circle around the last four weeks on the chart for us to take a closer look at and see what these bars are telling us.
Looking at this chart, we can see that the market reached its high four weeks ago when the price was above 228. Since then we have experienced what is called a “pullback”. The question is, is this really a pullback, or the start of a downtrend? Have we seen the high for the immediate future? A close look at each bar’s high and low will give us clues.
The bar with the red arrow pointing to it has a higher top than the bar to its left. That is a good sign that the market is experiencing a pullback and not a downtrend. In a downtrend we would see both lower highs and lower lows on a bar when comparing it with the bar to its left.
The bar with the yellow arrow pointing to it (this week’s prices) has a higher low than the red arrow bar on its left. This is a good sign. The yellow bar’s high is two cents higher than the previous bar, which isn’t much, but it is higher. Therefore, the yellow, most recent weekly stock market has a higher low and a higher high. That’s further indication that the uptrend on this weekly chart will continue. Based on what these charts are showing us, we should see a higher stock market ahead.