Chart of the Week & Content Wrap – 10/4/24

Oct 06, 2024

Today’s report includes:
-Chart of the week
-Links to free content & press
-A list of our premium reports from the past week

Chart of the Week – Trading Boxes

This write-up appeared in this past Friday’s Opening Look piece, which Trader & Professional members have access to.

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There now have been 10 trading days since the +1.7% move on 9/19. As we’ll recall that huge advance happened the day after the last FOMC meeting and the 50-bps cut. This kind of behavior is visible via the trading boxes that the SPX has formed all along the way over the last 11 months: Trading ranges have persisted until a breakout or breakdown occurred. From November’23 through March’24, this was one-sided, with only breakouts resulting. And while that kept the long-term uptrend intact, said breakouts weren’t resounding.

After the top in March, though, the box breaks have been more forceful, and we’ve seen more back and forth movement. Indeed, the rebounds post the selloffs have been even stronger, but any time that the market pauses, there’s a chance for a reversal to develop. The trading boxes always capture this.

Yes, there have been a few false moves over the last few months, but how the SPX fares vis-à-vis the current box will be telling. An upside resolution would keep the classical pattern breakouts in play; a box breakdown could negate them. A box breakout now also would be the first time we’ve had two straight since three that happened from May through July.