June 29, 2010

S&P 500 Hour chart showing deviation

HOUR CHART OF S&P 500
CLICK TO ENLARGE THE CHART
  • When price deviates from an important moving average it tries to catch up with the moving average either with a reversal or with a sideways correction.
  • Especially when the move down or move up is very swift the opposite move to catch up with the moving average will happen with a reversal. 
  • This is not a thumb rule but has seen it happen many times in charts. 

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