In pivot talks and here on this site I have sometimes used the phrase "looks like" support or resistance. What does this mean?
Sometimes a level clears but barely, and it doesn't turn out to be a good entry. For example, I pointed out a long on DXY because it seemed a bullish trend was developing but this was a mistake as 2HP did not yet have the "look of support" shown near the arrow.
If we added a simple moving average - just one to be very clear - then we also saw a reason to pass. This is the downward sloping 200MA in black here.
Adding in QP and monthly Ps, we see a much better entry on 10/4 when Q4P "looked like" support - with price clearly lifting from that level - which also cleared 2HP and D200 as well. Then 10/7-8 the YP also clearly "looks like" support.
With all this in mind here is a pivots only daily chart of SPY, with RSI and tweaked MACD at the bottom.
How many times does it "look like" pivot resistance - not breaks but acting pushing the price down. What I see is labeled with arrows.
Some of this depends on what you count as an incidence. If we are measuring by trading days then there are probably a few more arrows, like 9/28, 9/29 and 9/30 all have the SepP "looking" like resistance, but I only drew one arrow. Yet those were clustered in one window. Probably we should measure apples to apples so we would not count that as 1 incidence in a certain number of trading days.
Now let's try to get the important moves and take out monthly levels, leaving YP, 2HPs and QPs (yearly, half-year and quarterly). It is totally normal even in a strong uptrend to see monthly S1s from time to time. This will give us the more important changes in trend.
I am only drawing one arrow in October because that is only time I see a red bar with the pivot pushing the price down, ie, "looking like resistance." The 10/11 move I classify as "break."
Now let's add some MAs to the picture and see if there are any times were these moves are happening with a rising or falling MA on the same move. In the chart below, 10 is aqua, 20 orange, 50 purple, 100 thin black, 200 thick black, 200 thick brown.
The January move had already dropping below several downward sloping MAs. Really trouble began on 12/31 with rejection of 2HP, drop from falling 200MA and 20MA, already under 50MA and break of 10MA all on the same day.
This also puts the March YP pause as less threatening, yes under D100MA but above a nicely rising 10MA which held as support (and if lower a rising 20MA not far below that).
Now price is already under a falling 50MA, and pushing pushed down by falling 10MA, flat 20MA and still somewhat rising 100MA. This is not as bad as January yet, but clearly worse than March.
So if we view things this way, the move we just saw on Friday 10/14 was the second most threatening day to SPY uptrend all year, after 1/6 (or really 12/31/15 to be right). There is a similar conclusion with DIA & VTI as well. We'll see what happens.