SPX Overview; Fascinating Double Bottom(s) Chart; Bullish Breakouts on Volume;
Today we will peek at the S&P 500 as we head into the holiday period, then look at a fascinating chart defined by four double bottoms that has now made a breakthrough to the upside, and end with multiple stocks that have bullish volume today.
Start with the S&P 500 (SPX)
As we head into the holiday period, and then head out, it’s time for a quick look at the S&P 500. Here is a 5-year chart and then the 3-year chart of SPX:
If you’ve watched financial TV recently, or read financial articles, there is a rather deep split on the direction of the market as we head into the close of the year.
The 5-year chart demonstrates it rather well, once we allow Pattern Finder to draw in the trending support (red line), trending resistance (green line), and repeated congestion points (pink lines).
We zoom in:
SPX saved support after falling into technical failure and that rip higher was due to the surprisingly good CPI report.
We see the index right on support and at congestion, with a failure to hold support potentially sending the SPX down to the 3600 level or a repeat rally on the next CPI report having room all the way up to 4200.
These are the levels you have likely heard (or read) about, and Pattern Finder makes it rather easy to see why.
The 3-year chart helps us out even further if we focus on the recent ascending base.
SPX has seen a series of lower highs (automatically drawn in by Pattern Finder in the green trending resistance line) and a rally that has neared exhaustion (the green line.
Even further, the current level is right at the top of a prior ascending base, which does tend to act as resistance in a failed rally.
The conclusion is easy - the market needs good news to break the cycle of lower highs, or it can drop to shorter-term support (3600). The trade is… not as easy.
Fascinating Double Bottom(s) Chart
This is one of the most interesting charts we have seen in a while. We found it from the ‘Pattern Breakouts’ tab in Pattern Finder:
We looked for recent double bottoms as a possible short idea, but what we found was… this - the MNST 3-year chart:
There is actually a huge amount going on in this chart and while we are clearly pitching our product as we do our analysis, it’s also the case that there is no way most traders would have found this pattern set-up without computing power.
To make the patterns clearer, we have turned the chart into black and white, and used color to annotate.
Check out the four double bottoms:
The first double bottom in MNST occurred in late 2020, and the top of the double bottom pattern often times acts as congestion, but this is wild.
Following the conclusion of that first double bottom, we see three more that have bases at the prior high and exhaust at the same higher price each time.
This is a perfect example of the double bottom pattern peak and trough acting as congestion, and… no story is complete without a possible breakout.
Let’s zoom in:
MNST has finally broken that repeated congestion and failure of the peak of those three double bottoms.
Some Bullish Action
Finally, we leave you with some bullish breakouts using one of our canned screens ‘Bullish Heavy Volume on the Day.’
The filers are as follows (and leave us with 16 stocks):
We share the top four results sorted by the 1-week stock change and find three stocks with 5x normal daily volume today, and one with 3.5x daily volume.
This is all using the early morning trading period, so the volume trajectory could change by the end of the day.
We’ll leave the chart analysis to you on this one.
Pattern Finder members may find the results of a resistance breakthrough, ticker UHAL, also worth a peak.
We truly hope you are enjoying using Pattern Finder and our posts and see how easy it is to improve your trading.
The page below includes the video ‘How to use Stock Charts in 5 Minutes’ so whether joining Pattern Finder as a member or not, hopefully there is some value to visiting the page: Learn about Pattern Finder
Thanks for reading, friends.
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