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Technical Analysis Of US Stock Market April 2 2018

The S&P 500 futures is still sitting at its rising 200 day moving average. So far, this psychological support is still helping to support the stock market. We will have to see whether the support can hold this week. In these kind of circumstances, either the market will rally back up or crash through the 200 MA eventually to send the market lower.

The chart above shows the daily chart of the S&P 500 futures.

Well, in the past when it formed a triangle, it broke lower. I have drawn the earlier triangle with blue lines. If you look at the seasonality chart below where March is a bad month for the S&P 500, it is no wonder why it broke lower.

Right now, the S&P 500 might just be forming another triangle which you might want to pay attention too. If the S&P 500 can stay above and find support at the rising 200 MA, then it might just continue to drift higher and perhaps even break above the upper line in the triangle.

Seasonality Chart Courtesy Of Stockcharts.com

The above is the seasonality chart of the S&P 500 which you can find in stockcharts.com.

As you can see, March was a bad month for the S&P 500 with it only closing higher 40% of the time. However, April and May have better track record of closing higher 100% of the time for the past 5 years. So, it is just possible that we might have a nice rally back up if the 200 MA holds.

We now look at the 60 min chart of the S&P 500. As you can see, the S&P is also forming its own 60 min triangle as well. Triangles are battles between bulls and bears and you can see them in the S&P and Dow because of the intense battle between bulls and bears.

I have drawn the immediate support using the blue line. If S&P can stay above this immediate support then it is likely to break higher out of the triangle.

Happy trading and investing.

As always, always have a trading plan and follow it.

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