Think moving averages are just lines on a chart? Wrong.
They reveal the truth about support, resistance, and breakout strength.
Here's how to read them like a pro π [THREAD] $SPY
They reveal the truth about support, resistance, and breakout strength.
Here's how to read them like a pro π [THREAD] $SPY
Major moving averages (MAs) matter because traders use them.
That attention gives them power.
On daily charts, the 50D, 100D, and 200D MAs act like magnets, and battle lines, as support and resistance.
That attention gives them power.
On daily charts, the 50D, 100D, and 200D MAs act like magnets, and battle lines, as support and resistance.
π¨ How to spot a REAL breakdown:
Long red candle smashes the MA
Closes below it
Follow-through selling the next day
Thatβs your βescape velocity.β Otherwise, it's just a test.
Long red candle smashes the MA
Closes below it
Follow-through selling the next day
Thatβs your βescape velocity.β Otherwise, it's just a test.
π‘ How to know support will hold:
Mixed overlapping candles on the way down
Weak trend = support likely to hold
Bonus: A bounce before touching the MA means aggressive dip buyers.
Mixed overlapping candles on the way down
Weak trend = support likely to hold
Bonus: A bounce before touching the MA means aggressive dip buyers.
π« How to know resistance will hold:
Market dropped below the MA
Now struggling to reach it
Mixed green/red candles = weak bounce
Sellers jump the gun = strong resistance
Market dropped below the MA
Now struggling to reach it
Mixed green/red candles = weak bounce
Sellers jump the gun = strong resistance
π How to confirm a breakout:
Long green candles into the MA
SPY closes well above it
Needs follow-through buying the next day
Weak bounces wonβt cut it.
Long green candles into the MA
SPY closes well above it
Needs follow-through buying the next day
Weak bounces wonβt cut it.
Breakouts & breakdowns only matter if price ESCAPES
If price chops around the MA just ignore it.
Mark horizontal support/resistance and wait for a breakout from the range
If price chops around the MA just ignore it.
Mark horizontal support/resistance and wait for a breakout from the range
π Golden Cross = Bullish
50D MA crosses above the 200D
π Death Cross = Bearish
50D MA crosses below the 200D
Both are rare, but watched by institutions = they matter
50D MA crosses above the 200D
π Death Cross = Bearish
50D MA crosses below the 200D
Both are rare, but watched by institutions = they matter
Donβt worship MAs. Use them for context, not entries.
They're tools to read strength, momentum, and confirmation.
Price is truth.
They're tools to read strength, momentum, and confirmation.
Price is truth.
Leave a π if you found this thread helpful and follow me for more trading education and setups.
β’ β’ β’
Missing some Tweet in this thread? You can try to
force a refresh
γ
