Summary
The stock market has come alive after some scary moments last week. In the past three days, the S&P 500 (SPX) has gained nearly 3%, while the Nasdaq and Nasdaq 100 (QQQ) have recovered over 3%. The SPX is up 3.6% from its low in a day 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 five-day/13-day exponential moving average (EMA) is close to turning bullish. The five-day/13-day EMA is already back to bullish on the Nasdaq and the QQQ. All three indices have retraced over 61.8% of their recent difficulties and are not far from all-time highs. Indicators that we rarely talk about, and 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 center point 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, initiation of a strong uptrend with a break above the upper channel, and vice versa. From October 2023, the SPX fell below its lower channel but rebounded quickly