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Charting the S&P 500: A Strong Push Means Higher Prices Ahead

This trend is up and now we have a higher low in place.
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That was quite a strong week packed into such a small timeframe. All of the action was connected between Tuesday and Wednesday. Of course, those two days had the release of inflation data (PPI and CPI) and Chair Powell speaking

Importantly, the trend was confirmed with another blue candle in the top pane, which means this trend is up and now we have a higher low in place.

$SPX-18_May_2024_09_05

Notice, we have changed the structure of the channel to include that recent low, which we're going to rely upon when the next pullback happens. The parabolic SAR (stop and reverse) is now showing two dots in the top pane. 

You'll notice at previous turns the SAR tends to stay bullish for several candles. Most recently when it turned, the bullish condition lasted for months. The widening range shows expansion due to the increased market volatility from late April (remember when the VIX hit 21%?).

Moving Average Convergence Divergence (MACD) is still making a turn up and will cross over soon for a buy signal. Of course, we like to see that confirmed. Stochastics remain bullish (bottom pane) and money flow (pane 3) remains robust. 

 Is the market overbought? Sure it is, but that is not a reason to sell.

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