Lines, hooks and sinkers: Comparing the S&P 500 equities market's downtrend with Chart of the Day

I've emphasized trendlines in many of my charts, including my S&P 500 daily, weekly and monthly charts, and my chart of the dollar which I posted again earlier this afternoon. Trendlines are also analyzed closely by Andre Gratian, who provides his weekend reports posted here, and many other chartists including Carl Swenlin of DecisionPoint.com (whose trendline chart I shared from the ChartWatchers blog at Stockcharts.com recently). Well, guess who's weighed in with a trendline comment for the markets today - it's Chart of the Day, with today's free chart. Naturally I find it quite interesting that they are identifying and drawing attention to the SPX pushing resistance at an upper trendline of a downtrending channel, at the same time that the dollar tested my upsloping trendline. And at the same time that the QQQQ (Nasdaq 100 ETF) is testing its 200-day moving average, and the VIX has rebounded from that .786 Fibonacci retrace level during the Armstrong time cycle window.

I can also recommend that my readers check out the very interesting post, "SPX Weakening at 45 Days from March Low" posted yesterday (4/23) by AndyAskey at PTV-Investing Blog. That post includes Gann angle trendline analysis, along with time factors, that plays into this as well.

If all this "comes together" then we'll see the dollar rebound up, and equities roll over downward. Not that I will try to "talk the market" into doing what I won't - I know it will never listen - but if we're going a good job listening to it, then the market may be finding this way to tell us once again that the rally is over.

Here's what Chart of the Day is depicting and describing about their trendlines on the S&P 500:

Chart of the Day
For some perspective on the latest stock market action, today's chart presents the current trend of the S&P 500. As today's chart illustrates, following the October 2007 peak, the S&P 500 traded with in a relatively narrow downward sloping trend channel. That trend was interrupted by a historic financial meltdown. Since the meltdown, the S&P 500 has resumed trading within the confines of a trend channel (albeit in a volatile fashion) and is currently testing resistance.


Webmasters, journalists, and bloggers may post an occasional free Chart of the Day on their website as long as the chart is unedited and full credit is given with a live link to Chart of the Day at http://www.chartoftheday.com.

So, what are we to do with all these "lines"? Let me put it this way - don't let the rally get its "hooks" into you - because you want to avoid becoming a "sinker"!! We'll remain unbiased, and add this trendline resistance into our skeptical view that the market is ready for "the pullback." If the market proves otherwise by doing something different, then we'll adjust - but not until then.