The S&P 500 SPDR (SPY) chart shows a sharp advance from mid February to late March and then a choppy advance since early April. The April-May lows mark a clear support zone in the 204 area and these lows hold the key to the medium-term uptrend. In theory, SPY could pullback to the 205-206 area and still be within the confines of a choppy uptrend.
The indicator window shows the Vortex brothers (+VI and -VI). These indicators compare highs and lows, and use the Average True Range (ATR) to measure positive trend and negative trend. I am using 20 days because this represents a month. The pair has a bullish bias when +VI (green) crosses above -VI (red) and a bearish bias when -VI crosses below +VI. There can be quite a few crosses so I also look for a cross above 1 to confirm any signal. A bullish signal triggered in mid February, a bearish signal in mid May and a bullish signal in early June. This indicator is not immune to whipsaws and will remain on a bullish signal until -VI moves above +VI and exceeds 1.
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