Always consider hidden risks
SPY ETF PVT: Break Out without Strenght ?
September 17 ( From Stockcharts , Columbus Dispatch, Barchart, TradingView )
If you would like to receive our free daily markets updates, please Sign-Up
We observed that the Price Volume Trend of the SP500 tend to
turn earlier and or confirm the trend of the Mighty SP500 as you
may see in the chart below...
Since we broke the Major Rising Wedge Support Trendline on
August 20, PVT level cratered but at a lower level that the
previous severe correction on October 2014.
( See Chart Below - Bottom Panel - Ellipses )
From August 24 to August 28, we had a strong technical rebound
followed by a weak dead cat bounce from the PVT ( did not even
reached October 2014 level ).
( See Chart Below - Bottom Panel - Grey Trendline )
We had a second rebound wave from September 1 to September 15;
that second strong rebound phase since the broken wedge for the
Mighty SPY but the PVT got a lot weaker :That move was done
without volume indicating a divergence and a fragile uptrend as
shown by the chart below... ( See Chart Below - Bottom Panel - Red Line )
So the most interesting factor to me is that we broke on September 16 the Major Resistancce Trendline from the Pennant Technical Pattern but still failed to see strong PVT or a rising volume environment. We always need to be cautious when we have Big bounces on declining volume...
( See Chart Below - Top Panel Blue Bar for Daily Volume, Ellipse and Bottom Panel - Blue Line for PVT )
Read also from Sep 14: SPY Technicals: My Dear Pennant Pattern ?
"To fight and conquer in all your battles is
not supreme excellence; supreme excellence consists in breaking the enemy's
resistance without fighting."
-Sun Tzu, the Art of War
SPY ETF PVT: Break Out without Strenght ? $SPY, $SPX #Trading #Emini #ES_F #SP500
Price Volume Trend - a Definition
PVT is a leading indicator for future price movements. Although interpretation of PVT is similar to the OBV and the Accumulation/Distribution indicators, PVT more accurately demonstrates the flow of money. PVT adds only a proportional amount of volume to the indicator, whereas OBV adds the same amount of volume not considering whether the market closes up a fraction of a point or triples in price.
1.Rising PVT means new money, sometimes referred to as "smart money, " is flowing into the marketplace. The result will be that the present trend will continue. Accelerating PVT rise indicates that "the masses" are joining the new price trend.
2.If the PVT then levels off, it is often an early warning that the trend is finishing.
3.Declining PVT indicates that the smart money is liquidating.
4.If the PVT moves sideways or falls while the price is rising, the increase in price is not confirmed and a market top or bottom may be indicated.
SP500 Index ( Top Panel )
Price Volume Trend ( Bottom Panel - 7 DMA Blue Line )