Chart of the Day - Friday, October 6, 2023

Today’s Chart of the Day was shared by Frank Cappelleri (@FrankCappelleri). The S&P 500 staged an impressive reversal today, which helped it avoid a five-week losing streak. It gapped lower, falling as much as -0.91% this morning in a knee-jerk reaction to the September job report. However, it rose +2.11% off the intraday low, closing the day up +1.18%. Frank points out that price violated a short-term downtrend line that has been in place since mid-September. In a tweet yesterday, Frank explained, “Breaking a steep downtrend line has led to strong bounces since the start of ’22.” The S&P 500 found its footing exactly where it needed to this week, and Friday’s large reversal sets a bullish tone for next week. The next task for the bulls will be filling the gap from Sept. 21 by closing above 4,400.