Bullish Pattern Forming On Wall Street

Grab Wall Street By the Bulls


Week-In-Review: Bullish Pattern Forming On Wall Street

The market is forming a bullish handle pattern in a larger U-shaped (a.k.a. cup) shaped based. The major indices are tested major support near their respective 50 DMA lines on Thursday. For now, that is the next important level of support to watch. The next level of support is September’s low which is just below the 50 DMA line. On the upside, the first level of resistance is the downward trendline in the handle, then the high of the handle, (October’s high), and then the all time high for each of the major indices from earlier 

this year. This brings up my next big trading rule, the next move wins. For now, we still have a slew of earnings that are coming out over the next few weeks and of course the election. 

Monday-Wednesday’s Action:
Stocks opened higher on Monday but sellers showed up and sold off by the close which was not a good sign. The market continued to focus on the ongoing drama regarding the stimulus package. Stocks opened higher on Tuesday after Housing starts rose by +1.9% to a seasonally adjusted annual rate of 1.415 million units in September 2020. That missed estimates for 1.457 million. Meanwhile, single-family housing starts jumped 8.5 percent to 1.108 million, while the volatile multi-family segment dropped 16.3 percent. But sellers showed up and stocks gave back most of the gains by the close. After the close Netflix gapped down after reporting earnings and Snap gapped up after reporting a very strong quarter.  Stocks fell on Wednesday as sellers remained in control. In other news, stimulus talks continued even though Pelosi’s Tuesday deadline expired. After the close, Tesla gapped up 3% after the company reported earnings.

Thursday & Friday Action:

Stocks rallied nicely on Thursday as optimism spread regarding the ongoing stimulus package. Bitcoin surged after PayPal said it will begin accepting the digital currency. Bitcoin also rallied after legendary investor Paul Tudor Jones said he thinks Bitcoin is a great hedge against inflation. After the close, President Trump and VP Biden held their last debate before the election. On Friday, the market was quiet as the bulls defended the 50 DMA line. 

Market Outlook: Flood The System With Liquidity
The bulls are back in control as September 2020 appeared to be a normal (but steep) correction within a longer term (and strong) uptrend. Earlier this year, global governments, and global central banks, once again, stepped in with massive rate cuts and other “aid” packages to help “stimulate” both Main Street and Wall Street. As long as March’s lows hold, the market will likely move sideways to higher. On the other hand, if March’s lows are breached, then look out below. As always, keep your losses small and never argue with the tape.


Do You Know The Most Under-Valued Stocks In The Market?
 Our Members Do. Take a FREE TRIAL – CheapBargainStocks.com


Here are more articles you may like

Claim Your Free Guide Today

Give us your email and we will give you the tools to change your life. 


Learn about Early Entry Points & much more...

© ChartYourTrade | Contact us: website@chartyourtrade.com

Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.

Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.

Terms of Service