Markets rallied strongly in Friday’s
trade: the broad-market S&P500 added 1.7%, the NASDAQ Composite tallied up
a 1.5% rise, and the Dow Jones Industrial Average split the difference with a
1.6% advance.
In the case of all three indices, Friday’s
rally – which actually began with intraday price action on Thursday afternoon –
has provided a lift from 2-month price channel support.
Nonetheless, despite their prima facie similarity, the 2-month
price channels for the three indices were not formed identically. In the case
of the S&P500 (SPX), the better-defined channel boundary is the upper
resistance line, which connects the local maxima on 5/22, 5/29, 6/20, and 7/3,
along with intraday, hourly local maxima or minima on 6/19. The parallel lower
resistance line, then, links local minima on 6/25, 6/28 and 7/12, along with
intraday, hourly local maxima or minima on 6/1 and 6/5. Needless to say, see
the screenshot below for the helpful graphic.
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| SPX, 180 d 1h (zoomed in to 5/9 to the present) |
In contrast, the 2-month price channels
on the Dow Jones Industrial Average (DJX) and NASDAQ Composite (COMP), from
which Friday’s rally launched, formed in somewhat different fashion. The DJX
channel does not connect the highs of the July 4th rally, for
instance, and the COMP channel does not connect the lows of 6/28.
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| DJX, 180 d 1h (zoomed in to 5/9 to the present) |
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| COMP, 180 d 1h (zoomed in to 5/9 to the present) |
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