Summary

The stock market has come alive after some scary moments last week. Over the past three days, the S&P 500 ( SPX ) has gained nearly 3%, while the Nasdaq and Nasdaq 100 ( QQQ ) have recovered more than 3%. The SPX is up 3.6% from its intraday low last Friday, the Nasdaq is up 4.5% and the QQQ is up 4.2%. The SPX has quickly recovered its 50-day moving average and the 5-day/13-day EMA crossover is close to turning bullish. The five/13 day EMA has already turned bullish on the Nasdaq and QQQ. All three indices have recovered more than 61.8% of their recent declines and are not far from reaching all-time highs. Indicators that we rarely talk about that are similar to Bollinger Bands are price channels. For the daily chart, we use 20-day price channels. The upper channel equals the 20-day high and the lower channel equals the 20-day low. The middle channel is the midpoint of the other two channels. There are many ways to interpret price channels. They can be used for support and resistance, overbought and oversold areas, the start of a strong uptrend with a break above the upper channel, and vice versa. Since October 2023, the SPX dipped below its lower channel, but quickly recovered