Chart of the Day - Monday, August 19th 2019

Today's Chart of the Day was shared on Twitter by Adam Koos of Libertas Wealth Management Group (@AdamKoos). It is a daily candlestick chart of the S&P 500 index. The chart serves as a good roadmap for investors looking to buy the August pullback. Adam notes some bullish technical developments that have taken place. 1.) A positive momentum divergence has formed. This occurs when price makes a new low while RSI does not make a new low. 2.) Declining volume on a double-bottom pattern. This indicates that bears are losing steam as selling wasn't as heavy on the second bottom. Adam suggests these bullish patterns will be confirmed when price breaks above the mid-month highs around 2940. He adds that a stop loss should be placed at the lows of the double bottom pattern around 2840.