The most important thing about this instrument below is the blue trendline. Leave off all the rest, if you wish.
Looking closer at the more recent index value (in the red circle), it’s easy to see that it’s approaching the trendline again. Of course it may never hit the trendline – and the other possibility is that it could bust through it and head very south! However, the evidence on the chart is that even when the S&P breaks through the trendline, it does not actually venture far south.
However, the history of performance of anything or anybody is an indication of probable behaviour for the future. So whilst anything is possible, there are certain probabilities that are based on historical performance. And that’s what this business is about.
So how am I stalking this one. Well, I’m not going to be logging in on Tradingview daily to check on this – as there is so much going on out there. What I have done is to set up two alerts:
1. I’ve set up for email alerts when the RSI value (bottom bar containing wavy lines) falls outside of the range of 80 to 20.
2. I’ve also set an email alert for if price falls below the trendline.
The above is my ‘net’ – in a manner of speaking. I do this on a range of charts, so I don’t have to be eyeballing each of them daily or whatever. When these alerts go off, it doesn’t mean I’ll just enter a trade. Anybody who does that or thinks it works like that, really does not understand this business.