Trendlines are very important in the stock market. Price more often than not adherse strongly to them, and that means price just doesn’t bottom or peak randomly as it may seem to the untrained eye. If you know the trendlines then your trading and investing will improve dramatically: the trend (line) is your friend.
Here we show the S&P500 since it’s price low made in March 2009. The black trendlines are very important and price bottomed right at the lower line last week and bounced very strongly off it this week: the long term trend remains up.
We did get bearish earlier this year as price dropped strongly below that same trendline but then managed to resurrect itself strongly and quickly. That’s called a whipsaw; wrong footing most. Yep, nobody is perfect.
The number labeling are called waves, based on Elliot Wave Theory. If we understand the market correctly it is now in black 3 of blue V. This means the market will go much higher.
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