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S&P 500 Weekly Analysis 12/6/2017

S&P 500 Weekly Analysis 12/6/2017

S&P 500 Weekly Analysis

S&P 500 Daily Chart


S&P 500 Weekly Analysis


Point A


After a period of consolidation, professional traders want to start entering the market. They want to get into the market at lower prices. In life wouldn’t you want to purchase goods and services at the best price? You’ll do whatever it takes to get the best price. The same is true in the financial markets, and it’s apparent on the S&P 500 at point A.


The price broke out of its consolidation which it was in for 16 sessions. We see the price get marked down and to the retail trader that is a signal to go short. They hear in the media that the S&P 500 has rallied for the last eight years and it’s time for a correction. The news on the day, 17th May 2017; U.S. President Donald Trump asked FBI Director James Comey to halt investigations into Michael Flynn. What has this news got to do with for example the price of Apple stock (AAPL)? AAPL dropped from $159.94 to $150.25 on that day. Quite a significant move!!!


The volume on the S&P 500 on that day was ultra-high, broke out of consolidation and closed on the low. The bar was widespread, telling us there must be professional activity.  The following day price action did dip below the low of the previous day’s bar. This bar is also widespread up bar which closed in the middle of the range.  If the previous day was all selling, would you think that the next bar would be down? It isn’t; it’s an up bar which signals strength. We see price rally after that.


Point B


During the rally we see the market get tested. In an uptrend the market always gets tested. The price gets marked down only to finish on its highs. A maneuver by the smart money to see if there are any sellers present in the market. The volume on this bar is also ultra-high. With the next bar being an up bar, there is continued strength, and the market continues to rally.


Point C


At point C we see a VSA principle, SOW 134 No Demand. This signal tells us the upward pressure may halt and expect lower prices in the short-term. Professional money is not interested in higher prices at this time as the volume was lower than the previous two bars. The next bar was down confirming the signal, but the price has just consolidated up until Point D.


Point D


Pricing action at point D shows a wide spread bar which has closed in the middle of the range. The volume is ultra-high, and the catalyst for this bar was the UK elections. We see that price broke into all time highs and also broke out of consolidation to the downside. Price traveled down to the high of the bar at point B, our test bar. The reason for this is that areas of ultra-high volume always get tested, and this is what happened at point D. Considering we are still in an uptrend, I would expect to see higher prices as I view this bar as a shakeout. I would expect to see ome consolidation before the next up move.


The key level to keep an eye out for is 2466, a break above this level will likely lead to higher prices.


Have an excellent trading week


Danny Younes

Professional Investor and VSA Expert

The author of “Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis.”


Have an excellent trading day


Danny Younes
Professional Investor and VSA Expert

Author of Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis

Danny Younes

Danny Younes is a professional investor and VSA expert. Danny trades options, stocks and forex and has travelled the world teaching retail traders and investors how to invest safely in the financial markets using low-risk options strategies by analysing the markets using Volume Spread Analysis.

1 Comment
  • Catharine
    Posted at 11:20 am, June 12, 2017

    First time reading your analysis. This is excellent. Thank you. It would be good to know how we can apply these observations to trade better in say, Forex and Futures also.

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