Apr
This is the update of my April 17th post.
Last week I noted that the uptrend that started in early February had ended. During this past week, there was a consolidation, followed yesterday by a breakout to the upside. As you can see in this chart, this breakout is modest, and one would usually want to see some follow-through before declaring a new uptrend. But I have two reasons for believing that this really is a new uptrend. One is that other indices, such as the Valueline Arithmetic, are showing considerable follow-through. The second is that, as I’ll show in my next post, the monthly bars chart just broke out above significant resistance.
In this chart here, the previous hierarchy of Midas Support curves, S1 through S4, is now de-emphasized since that old trend is over, and I’m showing the beginning of the new S1 for the new trend.
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2 Responses to “S&P 500 Short Term – Starting New Uptrend”
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David, I’m new to the site and VWAP, but I got here via Dr Steenbarger’s soon-to-cease traderfeed blog where I gained an appreciation for VWAP as a stable place to place buy orders. Google might have been the final bridge here, but I forget.
The construction of the R/S lines and the four principal ideas behind VWAP make good sense to me, and once I figure out how to pick points for topfinder, I can write Excel routines (well, OpenOffice Calc) to sketch it in along with my support lines. At some point I’ll buy the commercial product for its automation once I successfully use my manual clunker for executing SPY trades, but AMTD’s programming language doesn’t seem to provide support for charts with Volume blocks as the domain variable, so I wouldn’t be able to go intraday. I’d hate to change online brokers over something like that.
About this blog particular entry–the art of choosing when to restart support line counting, absent any breaks down through three or four support lines, may forever elude me–I’m just a math geek, and a 58-year-old one at that. Instead, I just built a sixth support line (I thought one of the earlier dips merited a support line, but that’s part of the art of MIDAS, and I’m a rookie, and so am probably wrong to have done so), and it would seem calling it S5 (or S6) would reflect its potential instability.
What’s you personal record for number of unbroken support lines drawn? I concurred with last week’s assessment of breaking TopFinder, but is that enough to restart S1?
Regards,
Bill Kiele
Dr. Kiele, I’m sorry to be so late responding to you. Thank you for your interest, and your comments.
During the long bull market that lead up to the peak in 2000, I saw several examples where and S6 or even an S7 could be clearly identified, but this is unusual.
Regarding VWAP and Midas, the two are not synonymous. VWAP was the relatively simple idea that preceded Midas. However, Midas S/R curves are not to be confused with VWAP price points. By definition, a Midas S/R curve is a fixed starting point moving average of the volume weighted price, and acts as a support/resistance curve, to be used in the same way that trendlines are used.