Do support and resistance work on indices?

Discussion in 'Technical Analysis' started by Blitzjoker, Feb 20, 2021.

  1. %%
    True in most any market;
    some tend to do much better, like tech stocks/etfs. Maybe SPY is not so good in FEB, but this month is almost over........................................................................................SPXU + SH is different, but sometimes can find some profitable patterns.I liked to look @ real estate when its raining\ down pour\ they knew you were serious/LOL:D:D:D:D:D:D:D
     
    #11     Feb 22, 2021
  2. S&R absolutely work better than chance on major indices. You can draw trendlines and watch the next pullback to the trend line bounce off of it more often than not.
     
    #12     Feb 23, 2021
  3. Blitzjoker

    Blitzjoker

    Thanks for the responses on this. I have done a small amount of research on my own chosen instrument, the Dow 30. Although there are some likely looking support and resistance points from time to time, it is hard to say whether they are likely to be tradeable, or if they are just a trick of the mind to see patterns that are not really there. I’ll have to write some code and test it. Intuitively it seems more likely that such levels would occur more on stocks and commodities, as presumably traders sit on the sidelines waiting to invest in them (or cash out) at certain price levels. But maybe they do it with indices too.

    Looking at the charts, I'm still doubtful, but I’ll crunch the numbers at some point and have a better look.
     
    #13     Feb 25, 2021
    murray t turtle likes this.
  4. %%
    I have traded UDOW + DDM but that low PE stuff tends to go low, go low\go lower...................................................................................... Most milion$ are made in the stock market by buying every month for 40 years + market makeing/specialists..
     
    #14     Feb 25, 2021
  5. SunTrader

    SunTrader

    One chart won't do it. Hmmm :) Neither will a second one I'm sure. But here it is nonetheless another one of SPX 1 minute, not a Dow fan, with red support turned to resistance lines (naturally with this heavy selloff day) and magenta (50%) and blue (61.8%) fib retracements. Yup I've found long ago they work too no matter the naysayers.
    SPX res.png
     
    #15     Feb 25, 2021
  6. Blitzjoker

    Blitzjoker

    Thanks for this. Actually I thought your previous chart was good too. Possibly the Dow is too volatile to have these more solid looking levels.
     
    #16     Feb 25, 2021
  7. comagnum

    comagnum

    Yes, trading based on how price & volume act at support/resistance can be very lucrative. There is a great deal of discretion involved that will come with experience, so start out small.

    The 3rd test of a key level can often trigger a big reaction. Failed breaks of S/R tend to make the largest moves.
    upload_2021-2-25_12-21-29.png
     
    Last edited: Feb 25, 2021
    #17     Feb 25, 2021
    Blitzjoker likes this.
  8. Overnight

    Overnight


    Boo hiss Mr. Gumby. EVERYTHING broke down in that period you highlight in that chart. Except the VIX and all those inverse ETFs.
     
    #18     Feb 25, 2021
  9. comagnum

    comagnum

    Well everything else was not at a multi month resistance level offering a well defined risk level.
    Are you worried what ETFs are doing when your a riding a parabolic breakout - I sure don't. Your splitting hairs & missing the point which is trading S & R levels.
     
    #19     Feb 26, 2021
  10. treeman

    treeman

    Never buy right before supply.
     
    #20     Feb 26, 2021