The Dow Industrials (INDU) recently tested our upward trending support for the first time since we put it in place and traders should take note of this activity. The test of this trend also coincides with the 200-period MA on our 60-minute interval chart.
Dow Industrials Chart - 60-minute interval.
Our upward trend was developed by starting at point (A) the "anchor point" and extending this trend to point (B) or "evidence of trend" point. It was not until today, point (C) that this trend has been tested! So far (until it is broken) this looks to be a "valid support trend" and may be a level that buyers are keying off of. This "test" is one hour old and is not an opportunity for bullish traders to be betting the farm that this index or components of this index are going higher from here. However, traders should make note of this event and be able to use it in their trading scenarios (bullish and bearish).
S&P 500 Index Chart - 60-minute interval.
Traders will also want to be monitoring the SPX. We've recently added a horizontal level (thick blue) to our chart to help monitor trades. This horizontal level could be thought of as a short-term "water line". Traders might want to take notice of points (A) and (B) and how this horizontal level has acted more like a short-term level of resistance that it has as support. If it begins acting as support, traders will be alert to a potential bullish bias taking place in this index. If it acts as support and holds, this would be a deviation of past pattern and could be key in developing future trading scenarios.