January 22 Chart of the Day - S&P 500
Precision oriented price action technical analysis by far provides the best edges and most setups for traders and investors across the markets so that's what we use for the basis of our reviews
The S&P 500 (/ES) has taken traders on a roller coaster ride ever since setting its 6163.75 all time highs (ATH) back in mid December. Seemingly, the Santa Clause rally came early this past Christmas.
Price made a tumultuous drop just before the holidays and the headlines were full of doom and gloom and words like "correction" were being tossed around like candy in a parade.
Today, we’ll dive into the recent volatility through the lens of price action technical analysis.
We have featured over 350+ Charts of the Day since May 2023 and teach Price Action Technical Analysis Trading for FREE to traders who join our Highly Rated Trade Room.
Daily Chart
Earlier this week we shared this analysis with our highly rated Trade Room members even going so far as to also include hourly vantage points.
Let's take a look at what the Daily time frame chart may be telling us on ES and then take it down to a 4 hour chart to determine potential levels of interest.
We can see with great clarity that after setting its ATH price fell in dramatic fashion before the end of December ultimately making violent short squeezes up all while overall making a series of lower highs and lower lows.
However, just this week price seemingly broke the recent down trend and could be making a run to test or establish new highs.
Trading conditions have been superb because we are neither bulls or bears and simply benefit by trading price movement. And there certainly was a lot of movement in both directions the past month!
4 Hour Chart
The 4 hour chart is often referred to an intra-day trader's best friend as it can provide market sentiment and directional clues for the upcoming day / week.
We apply price action tools in an attempt to identify potential levels of interest always keeping in mind - Where could price go? These levels are not predictions, they strictly represent anticipatory levels where trader could decide to take action or not.
Advanced high to high Fibonacci anchor points for fast trending markets have been applied (orange levels) as well as support/resistance levels.
Closing around 6115 today price may be "resting" a bit before deciding on what to do next.
Many traders tend to over complicate this aspect of price action because price can either go up, go down, or essentially go sideways.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Only time will tell for sure what price will do next...
We've layered in traditional Fibonacci levels as well as support/resistance and trend to help identify potential price levels of interest and/or future price targets.
Armed with precision oriented charts like these both traders and investors can formulate their respective plans.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
