{"id":19773,"date":"2022-06-01T07:30:14","date_gmt":"2022-06-01T11:30:14","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19773"},"modified":"2022-06-01T07:30:14","modified_gmt":"2022-06-01T11:30:14","slug":"the-bulls-might-be-back-in-the-drivers-seat","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-bulls-might-be-back-in-the-drivers-seat\/","title":{"rendered":"The Bulls Might Be Back in the Driver\u2019s Seat"},"content":{"rendered":"

After several weeks, there’s finally a strong buy signal in the S&P 500 index (SPX).<\/p>\n

The last time we had this kind of signal was in early March.<\/p>\n

Back then, the SPX rallied over 8% before dropping to a low of 3810.32 and officially putting the index into bear<\/a> market territory.<\/p>\n

While it’s too early to say whether we’ve carved out a long-term bottom, the stage is now set for bulls<\/a> to be back in the driver’s seat.<\/p>\n

The buy signal I’m seeing now should guide this market higher at least over the next couple of months.<\/p>\n

Let’s look at the SPX price chart to see what I mean…<\/p>\n

\"Chart\"<\/div>\n

On the chart, we have the Bollinger Bands<\/a> (blue lines) which are one of my favorite tools to identify overextended market conditions.<\/p>\n

The upper and lower bands contain most of a market’s price action… and prices tend to bounce off those outer bands.<\/p>\n

I highlighted the last time the Bollinger Bands generated a buy signal in March.<\/p>\n

This buy signal was triggered when prices pierced the lower band and then closed strongly back above it.<\/p>\n

And this is the same type of signal we’re seeing now.<\/p>\n

Prices pierced the lower band at the beginning of May and have recently closed back above it.<\/p>\n

Take another look…<\/p>\n

\"Chart\"<\/div>\n

At the March buy signal, notice how prices went on to test the middle Bollinger Band after bouncing off the lower one.<\/p>\n

This middle band proved to be resistance<\/a> for the market and prices established fresh lows just below 4,000.<\/p>\n

This typically happens when a market is trending.<\/p>\n

You can see how in the run-up to the market’s top in September 2021, prices bounced lower off the upper band but found support on the middle band.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If the market breaks through the middle band on this buy signal, it would be an initial sign that the market is putting in a long-term bottom.<\/p>\n

The next step for the market to confirm the bottom would be for it to consistently tag the upper band while finding support on the middle band.<\/p>\n

And this is what intermediate-term traders should wait for before playing the long side of the market once again.<\/p>\n

On the other hand, short-term traders should look for opportunities to ride the market back to the middle Bollinger Band.<\/p>\n

Which, as of writing, is just over a 4% move from current prices.<\/p>\n

Happy trading,<\/p>\n

Imre Gams
Analyst, Market Minute<\/em><\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

Are you an intermediate-term or short-term trader?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Prices tend to bounce off this level…<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-19773","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-imre-gams"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19773"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19773\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19773"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19773"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19773"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19773"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}