Monday, September 12, 2016 1:57:45 PM
spy bullish Failure Swing bottom buy point ....by art hill
How might a settling process evolve? The chart above shows SPY with 10-day RSI in the indicator window. After the breakdowns and 10+ percent declines in August 2015 and January 2016, it took the market a little over a month to settle and ultimately reverse. Bullish Failure Swings marked the reversals in October and February. These were identified by Welles Wilder, creator of RSI, and detailed in his book: New Concepts in Technical Trading Systems (1978). A bullish Failure Swing occurs when RSI moves below 30, bounces above 30, pulls back, holds above 30, and then clears its prior high. This occurred in August-September and January-February. Notice that SPY had time to settle and tests its prior low during this process. Thus, a few more weeks of uncertainty could lead to some sort of deep dip, test of support and a bullish Failure Swing. RSI is currently oversold so the first part of the equation is in place. Before leaving RSI, notice that there was a Bearish Failure Swing in late August. The image below comes from Wilder's book.
How might a settling process evolve? The chart above shows SPY with 10-day RSI in the indicator window. After the breakdowns and 10+ percent declines in August 2015 and January 2016, it took the market a little over a month to settle and ultimately reverse. Bullish Failure Swings marked the reversals in October and February. These were identified by Welles Wilder, creator of RSI, and detailed in his book: New Concepts in Technical Trading Systems (1978). A bullish Failure Swing occurs when RSI moves below 30, bounces above 30, pulls back, holds above 30, and then clears its prior high. This occurred in August-September and January-February. Notice that SPY had time to settle and tests its prior low during this process. Thus, a few more weeks of uncertainty could lead to some sort of deep dip, test of support and a bullish Failure Swing. RSI is currently oversold so the first part of the equation is in place. Before leaving RSI, notice that there was a Bearish Failure Swing in late August. The image below comes from Wilder's book.
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