• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock S&P 500 Tempest in a Teapot
Stock

S&P 500 Tempest in a Teapot

by September 5, 2024
by September 5, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

As we have discussed many times, financial markets are fractal. Different timeframes produce similar price structures. This is a very valuable phenomena for the study and practice of trading. When tracking the intraday time frame; Wyckoff structures of Accumulation, Markup, Distribution and Markdown repeat over and over. This creates a laboratory for study and analysis. Below is just such a case study. By paying attention to the intraday charts, the Wyckoffian often identifies setups brewing in the larger timeframes. The market’s intention in the larger picture is often first revealed in the intraday.

S&P 500 Index, Intraday 30-Minute Timeframe

Chart Notes

1.      The upward stride of the $SPX (30-minute timeframe) accelerated into Preliminary Supply (PSY) creating a local climactic event.

2.      The continuation of momentum carried the index into a Buying Climax (BC). Note the poor quality of the rally from the PSY to the BC. Supply is present!

3.      The Automatic Reaction was sudden and deep with expanding volume. Large sellers were present and motivated to reduce their holdings.

4.      The BC is critical Resistance and the AR is Support in the newly formed range-bound structure.

5.      A Cause was being built from the PSY to the Last Point of Supply (LPSY) that had the character of Distribution. Volatility on weakness to the Support line tipped off the presence of active selling and supply. Volume expanded during the second half of the Distribution structure. More Supply, Supply, Supply!

6.      A Last Point of Supply (LPSY) completed the Distribution which was confirmed by the immediate gap reversal and expanding spread on the return to the Support line. This volatility supported the conclusion that Distribution was complete and Markdown was the next phase. The decline below Support confirmed Markdown in progress.

7.      Downtrends, even small versions, are typically volatile with large up and down swings. They are ideal for study purposes, while only the most accomplished traders should consider campaigning them.

S&P 500 Index, 1-Box Method, 15 Minute Data, ATR Scale (12.51 pts)Distribution is a Cause building process for the next trending move of the index, which is expected to be downward. A 15-minute Point & Figure chart with ATR Scaling is used to estimate the potential for the extent of the subsequent decline. With this 1-Box reversal PnF chart we identifed two count segments. Counting from right to left the count was taken from the Last Point of Supply (LPSY) to the Buying Climax (BC) and to the Preliminary Supply (PSY). Two count estimates were generated: 5,366.75 and 5,291.73.

Chart Notes

1.      Using the vertical chart of the Distribution and the chart analysis and then identifying those points on the PnF, two counts were taken. The lower objective estimate suggested that the decline could take back the rally from August 14th to the BC high on August 22nd. So, volatility could ensue as there is little natural support to those lower objective levels.

2.      Volume was quite high into the PSY and the BC, which indicated active selling on a scale up by the Composite Operator (C.O.) community. Thereafter, C.O. selling was persistent at the 5,642.01 Resistance level. Note that volume expanded throughout the second half of the Distribution. This further confirmed the Distribution hypothesis.

3.      Supply engulfed the index as it fell out of the Distribution, and this can be seen in the very high downside volume. A rally into the underside of the prior Support zone is possible. Selling would be expected to continue from under the old Support zone.

4.      How, and if, the index approaches the PnF price objectives will tell much about the subsequent intention of the $SPX index. The stock market is always an unfolding picture.

This intraday structure is a Tempest in a Teapot for its small size in time and potential extent of the move. This is valuable training and good practice for a Wyckoffian. Please take the time to zoom out to the larger daily and weekly charts to study the greater picture. As they are fractal, your practice will speed the learning curve. And your path to mastery.

All the Best,

Bruce

@rdwyckoff  

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. 

Wyckoff Resources:

Distribution Definitions (Click Here)

Wyckoff Power Charting. Let’s Review (Click Here)

Additional Wyckoff Resources (Click Here)

Wyckoff Market Discussion (Click Here)

Event Announcement:

TSAA-SF Annual Conference (to learn more CLICK HERE)

Old School / New School.

Conference Themes will range from Artificial Intelligence to Reminiscences of a Stock Operator.

In-person in San Francisco and Livestreaming for dues paying members.

Saturday September 14th at Golden Gate University

The TSAA-SF annual conference will be held on Saturday Sept 14th 2024 at Golden Gate University. It is an all day hybrid event, held both in person and via zoom. This year’s speakers include:

 * John Bollinger, CFA, CMT – Creator of Bollinger Bands, Author, Investor

 * Linda Raschke – Author of “Trading Sardines” Trader/Investor

 * Damon Pavlatos – CEO of Future Path Trading LLC & PhotonTrader

 * Dave Landry – Trader, Author, Speaker, Educator, Founder of DaveLandry.com

 * Robert Schott – Expert in Global Investments, Strategy, Risk, Derivatives, & ALM

 * Patrick Dunawila, CMT – Technical Analyst, Co-Founder of The Chart Report

 * Mike Jones – Data Engineer & Analytics Consultant

You Might Also Like
  • It all Started with a Big Bang!
  • Lululemon Stock: Try This Simple Analysis Before You Buy
  • Going, Going, Gone: End of Week Themes with GoNoGo Charts
  • Prepare NOW For A Potentially Huge Storm Ahead
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Nvidia’s $279 billion wipeout — the biggest in U.S. history — drags down global chip stocks
next post
‘Not a conspiracy theorist’: Harris fundraiser floats idea Trump colluding with Putin, Israel to win election

You may also like

Stop Trading In The WRONG DIRECTION With This Simple Rule

March 16, 2024

DP Trading Room: SPX Earnings Update

April 14, 2025

The Super Bullish to the Super Bearish

June 10, 2023

NASDAQ Breaks Out Again; 2 Stocks To Consider NOW

March 31, 2023

Is It Game Over for Growth Stocks?

July 20, 2024

DP Trading Room: Six-Month Period of Favorable Seasonality Begins Now!

November 4, 2024

Is There “Blood in the Streets” for August 2023?

August 22, 2023

Gold Price Surge: What Goldman Sachs’ $2,900 Forecast Means for...

October 3, 2024

Gold and Silver Set to Smash Records: Could 2024 Be...

May 17, 2024

Double Top on Industrials (XLI)

December 6, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Is This ADX Pattern a Warning...

    January 2, 2025

    MUST SEE Options Trade Ideas! DIS,...

    December 24, 2024

    The Best Five Sectors, #13

    March 31, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here