"Study the past if you would divine the future." | Confucius

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Comprehensive Market Review & Forecast, Monday, January 30, 2017

by Charting Wealth in Daily Chart Review

29

Jan

2017

by in Daily Chart Review

Here are our comprehensive stock chart reviews and forecasts of the S&P 500, NASDAQ 100, Gold & Bonds. At ChartingWealth.com we urge you to “Follow the charts, NOT the noise!”

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In just a few short minutes, we update you on what we see taking place in the market. At the end of every week, we give you this overview of the S&P 500, NASDAQ 100, Gold & Bonds. We also review the market moving news over the prior five days and what’s on the calendar for the next trading week. We want to help you follow the market and improve your knowledge of stock and ETF movements.

We focus on developing our skills in technical analysis. This activity is the forecasting of future financial price movements based on an examination of past price movements. Like forecasting the weather, technical analysis does not result in absolute predictions of the future. Instead, we try to anticipate what is “likely” to happen to prices over time. Technical analysis can use a wide variety of charting time periods and indicators that show price movements over time.

Since our objective is to predict future prices, it makes sense to focus on price movements. Price movements usually precede fundamental developments. By focusing on price action, technicians are automatically focusing on the future.

The market is a leading indicator and generally leads the economy by 6 to 9 months. To keep pace with the market, it makes sense to look directly at the price movements. More often than not, change is a subtle beast. Even though the market is prone to sudden knee-jerk reactions, hints usually develop before significant moves. We see the hints in our charts.

Our simple stock chart reviews and analysis can help identify support and resistance levels.  These levels are usually marked by periods of congestion within the trading range where prices move within a confined area for an extended period of time.  This limited movement tells us that the forces of supply and demand are deadlocked. When prices move out of the trading range, it signals that either supply or demand has the upper hand. If prices move above the upper band of the trading range, demand is winning. If prices move below the lower band, supply is winning.

Technical analysts view the market to be 80 percent psychological and 20 percent logical. Fundamental analysts consider the market to be just the opposite – 20 percent psychological and 80 percent logical. Psychological or logical is open for debate, but there is no questioning the current price of a stock, index, commodity, ETF or option.

Price is available for all to see and no one can doubt its legitimacy. The price set by the market and it reflects the sum knowledge of all participants. These participants have considered and discounted all available information and settled on a price to buy or sell. The price shows the forces of supply and demand at work. By examining price action to determine which force is prevailing, technical analysis focuses directly on the bottom line: What is the price? Where has it been? Where is it going?

Even though there are some universal principles and rules that can be applied, it must be remembered that technical analysis is more an art form than a science.  As an art form, it is subject to interpretation, but it is flexible in its approach. Each investor should use only the techniques that suit his/her style. Developing a style takes time, effort and dedication. The best news of all is the rewards can be significant.

We post timeless knowledge, along with our daily stock chart reviews that will educate and empower you to become a fearless and accomplished investor!

We standby the proverb, taken from Confucius, the Chinese master of wisdom: “Study the past, if you would divine the future.”

What is the cost to you? PRICELESS.

DISCLAIMER: We offer NO advice and make NO claims to expertise of any kind. This site is dedicated to knowledge and education through our stock chart reviews and other information — nothing more.

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