Dramatic Reversal – 10/13/22

Sometimes after trending down for days or weeks a stock or stock index could be triggered  into a selling climax.  What happened after the release if the monthly US- CPI report on 10/13/22 could be a selling climax.

The daily S&P 500 (SPX) chart courtesy of Trading View updates the action.

Just after the SPX open it was down 85.46 points.  This appeared  to be a possible kick off  drop down to the low SPX 3,200 area.  Then came a huge rally of 193.87 points that continued throughout most of the trading day.

 The  massive rally triggered a bullish crossover on the daily Stochastic, the RSI moved above its moving average line, and  MACD also had a bullish lines crossover.  These additional bullish signals  come after all three oscillators  recorded bullish divergence.

The rally stopped just below the declining  trend line connecting the 09/12/22 and 10/05/22 tops.  Also, there’s .236 Fibonacci resistance at 3,688.33, the rally high was 3,685.41 . These two factors represent strong resistance. 

If the bulls can overcome this resistance it could extend the SPX rally for several days or even several weeks.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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