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Strategies & Market Trends : SPY Advance - Decline data for 2014 through 2016
SPY 690.38+0.4%Dec 24 4:00 PM EST
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To: rimshot who wrote (437)5/4/2021 11:13:06 PM
From: rimshot  Read Replies (3) of 1118
 
$SPX daily closes chart with key price horizontals based on daily closes
and with three S&P 500 internals compared to their 15-day SMA

stockcharts.com

* bulls need the Full STO to remain above the 50 level for daily closes during future declines

====================================

FYI, in case we eventually see more down in future days / weeks / months --

David Steckler invented this setup with the criteria described at the SC Chart School:

in long-ago past years, Dave was a President of one of the Professional Market Technician Associations.
I know from his actual communication about this setup criteria in its early introduction
to technicians, Dave was earnest in his effort to make this an actionable & reliable setup

* SPY daily with the overall indicators described by Dave's setup,
with an eye now to future vigilance for what is described as the criteria
for a Stochastic Drop for SPY -

stockcharts.com

criteria for the Stochastic Drop -

Sell Signal Astute chartists will realize that this buy signal can easily
be reverse-engineered to produce sell signals.
In fact, we can name the sell version the “Stochastic Drop.”
A sell signal is indicated by the following elements:

70-day Stochastic Oscillator is below 50.
    14-day Average Directional Index (ADX) is below 20.

    14-day Stochastic Oscillator plunges below 20.

    Stock declines on high volume and/or breaks consolidation support.
Example - The trading bias was bearish because the 70-day Stochastic Oscillator
was below 50 and the Average Directional Index (ADX) was below 20.
The Stochastic Drop triggered when the Stochastic Oscillator plunged below 20.

Indicator Tweaks

While a consolidation does not always form when ADX moves below 20,
a move below this level usually coincides with a flattening of the trend.
Requiring ADX to move below 15 will improve the chances of catching a consolidation
on the price chart.
Also note that securities with relatively low volatility,
such as utilities, may have relatively low ADX ranges and require a move below 10 to identify consolidations.

The 14-day Stochastic Oscillator is a relatively active momentum indicator that moves from oversold (20) to overbought (80) quite frequently. This means there will be plenty of signals to choose from. Chartists should be careful of signals that occur after short dips in the Stochastic Oscillator.
In other words, a surge from 65 to 85 (20 points) is not as potent as a surge from 35 to 85 (50 points).

Conclusion

The Stochastic Pop and Drop signals are designed to catch a continuation move within the bigger trend. While the signals are easy to quantify, chartists should also consult the price chart and look for confirming patterns. A bull flag or falling wedge breakout can be used to confirm a bullish Stochastic Pop, while a bear flag or rising wedge breakdown can be used to confirm a bearish Stochastic Drop. Chartists should also consult the price chart to determine the risk-reward ratio and make sure it is acceptable before taking a position. Keep in mind that this article is designed as a starting point for trading system development. Use these ideas to augment your trading style, risk-reward preferences and personal judgments. Click here for a chart of the S&P 500 ETF (SPY) with the Stochastic Pop and Drop indicators already set up.

Link to article at SC -

school.stockcharts.com
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