Color Structure and Trend Charts

Let’s take a moment to update our “Color Structure and Price Trend” charts of our big three US Equity Indexes as we push toward the end of June 2015.

As usual, we’ll start with the S&P 500 Index:

S&P 500 Daily Chart

When we refer to “Price Structure,” we’re referencing the specific series of highs and lows that builds a trend.

Note swing highs and swing lows along the way. It helps to connect these with hand-drawn trendlines.

The color-coded price bars (based on Average True Range) help us quantify what is – and what is not – a swing.

In addition to studying the trend, we want to note the periods of trending (expansion) and contraction (ranging) phases.

Right now, price is in a clear uptrend but in the context of a sideways consolidation at the highs.

Unless we see a violation (break) under the lower rising trendline (which only happened once in October 2014), the odds (and trend structure) would favor a continuation of the uptrend in place.

The same logic applies to the Dow Jones and NASDAQ as highlighted below:Dow Jones Industrial Average (Daily):

Dow Jones Daily Chart

NASDAQ Composite (Daily):

Nasdaq Daily Chart

The NASDAQ has been the strongest trending index and just recently broke to new all-time highs.

Note the volatile (wide range) periods of early 2012 and mid-2014.

Otherwise, price has traded within stable rising bullish trendlines as drawn – which is the case today.

It’s helpful to quantify structure which serves as a pure way of viewing price without overlaying indicators.

For more daily updates from Corey, visit his blog at Afraid to Trade.com.