The chart below shows the S&P 500 and levels based from the opening range from back in January. This chart is meant to be a map of potential target levels and support. The sell off in August seems like such a distant memory as the market approaches new highs again. Applying this opening range technique can be applied to just about any time frame. The longer term chart below shows the entire year to date, while the second chart focuses on ranges established by the start of the third quarter.
S&P 500 Index Full Year Levels(click to enlarge)
S&P 500 Index 3rd Quarter Levels(click to enlarge)
Nasdaq 100 Index
The opening range established by the start of the 4th quarter could provide a great pivot point to base trades from for the rest of the year. As bullish as things seem with the Fed cutting rates, it is important to remember there are reasons that they are cutting rates. These reasons are real and there is a cost to cutting interest rates. The market is focusing on the positives for equities currently, but this bipolar marker will again focus on the risks, and this is where these range levels can provide support and stop areas to prevent large losses.
The next post will deal with combining these levels with volume and where the actual daily prices closes to determine hidden market strength and weakness.