In Bull Market: One of the most attractive trading setups: False Breakdown. This happens when stock/index cracks through the support - creates panic and then reverses leading to strong buying.
S&P500 has done this False Breakdown below 100 dma so many times in last 10 months that it has become a predictable pattern. The index has once again broken down below 100 dma overnight. It closed at 1909.5
Here's the S&P500 Daily Chart
Overnight S&P500 broke down below 100 dma but there is no sign of panic as bullish traders believe that history on their side. This is one warning which many believe is not a warning. Will that be the case? Well, we will see.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers