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Volume activity zones on the SPX Index

Support and Resistance Zones

The past few weeks have brought intense Volatility in the Markets. After being bruised to the 2650 level on the SPX, we saw a massive rally yesterday brought on by dovish comments by the Federal Reserve chairman. Markets got just the catalyst it was looking for, and the SPX blasted up 61 points.

But is this just a relief rally, intended to last just one or two days ? There doesn’t seem to be any clear direction or a prevailing trend. In such cases, how does one analyze and try to make sense of this Volatility. As we head into December, the G-20 meeting will be crucial as this is probably the last opportunity for the US and China to come to an agreement, otherwise a full blown Tariff was is all but guaranteed.

Strictly from a technical angle, it helps to go back 1 year on the Charts of the SPX, and perform an analysis of Volume Profile. This analysis reveals “Cluster” zones or the Volume activity zones of the highest Volumes in the past year. And as explained in this video, we seem to be exactly in the thick of the biggest Cluster zone or Volume activity zone of the past year. This battle cal last a while, but can be expedited by the outcome of the talks at the G-20 summit.

Please watch this video and comments are appreciated.

If you’d like to know more about Technical Analysis, please visit the Technical Analysis module here.


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