ProfitHarvest
Short

[SPX] SMA Trend Analysis - Beautiful 10 & 200 & POC Convergence

SPCFD:SPX   S&P 500 Index
Alrighty, long term I'm looking to build some kind of SMA trend and volume analysis model that could provide useful signals based on the angle of the trend lines and the POC and this is the start.

Like if you wish to support my work!

10 & 50 moving in parallel about ~7 degrees below the 200.

100 moving ~15 degrees below the 200.

POC is converging beautifully right with the 10 and 200 strongly signaling something is reaching a breaking point either up or down.

All fundamentals and technicals pointing to down. All hopes and dreams and FOMO pointing to up.

The market cannot be equal in value today as in January 2019. That is fundamental insanity.

So this will almost certainly be a breaking point downward.

Anyway, I digress!

Let's note here that the...
200 is trending 12 degrees below the POC
100 - 23 below
50 - 16 below
10 - 16 below

Lets call the average of these four Market Gravity POC . That gives out a Downward Gravity of 16.75.

Here's my first shot at reading the tea leaves:
I would say the 100 moving at such a steep degree against the 200 and twice the degree of the 10 and 50 is an extremely bearish short term signal. And the tandem trend of the 10 and 50 as bearish as well.

The fact that the Market Gravity POC runs below the 10, 50 and 200 is also a very bearish signal.

I would say the case is made AT LEAST for the market retesting March lows if not a medium to high degree of downside potential beyond that.

Where you at?

Comments

good job
+1 Reply
ProfitHarvest RadLunsford
@RadLunsford, Thanks Steve!
Reply
Keep it up
+1 Reply
ProfitHarvest Dubbiewinkelbauer
@Dubbiewinkelbauer, Plan on it :).
Reply
you need help finding the slope of a moving average? 10, 50 and 100 are positive slope. 200 is almost flat.
+1 Reply
tradeBob1 tradeBob1
correction. 200 dma is slightly negative (white line in your drawing). professionals do not use straight lines for trend lines. They use moving averages. The reason is a straight is an approximation, while a moving average is an exact number. Stocks never follow straight lines. They always follow a curve. In fact, the curve is a differential equation, with a starting number, ending number and various points in between. along with velocity vectors. best on your project.
+1 Reply
tradeBob1 tradeBob1
Yes, when moving average converge (agree), the signal is stronger. It's very common for moving averages to disagree, and produce bad buy and sell signals. This is especially true with divergence indicators. When there is strong divergence, the moving averages will agree. With a weak divergence indicator, the moving averages will disagree. Hope this helps. I would try to "average" the moving averages. That's simple and should be fast. If there is too much error, reject the signal. best.
+1 Reply
ProfitHarvest tradeBob1
@tradeBob1, Thanks for your insights!

Everything I do is grounded deeply in Fundamentals first and Market Psychology 2nd.

Trends then provide a bit of framework for understanding best entry (max value) and exit points (max profit) on the stocks I already know are fundamentally strong. Not expecting my lines to be followed! Just gauging the overall direction of the swings. It's all just extra data to validate my core fundamental analysis.
Reply
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