I believe that people have to believe in something. Belief is not limited to religious faith, such as believing in God, but also extends to many other parts of life, including marriage, the idea that driving is safe, and numerous other assumptions people make every day.

For traders, one such belief is that price action tells a story about buyers and sellers. I believe that is true because when buyers overwhelm sellers, prices rise. Conversely, when sellers overwhelm buyers, prices fall. That is a story I truly believe in.

Taking that idea a step further, do I believe that tools applied to price action also tell a story about buyers and sellers, as well as bias, risk, and targets? I would say: prove it to me.

In this video, I look at the S&P and the Nasdaq indices and examine not only the price action but also simple technical tools such as moving averages and swing levels that can help show who is in control.

To better understand this, technical levels help traders answer two basic questions: Who has the advantage—buyers or sellers—and what would change that? A moving average smooths out price fluctuations, making it easier to identify the trend and the levels where buying or selling may emerge. The price action and technical tools applied to the Nasdaq Composite index and the S&P index illustrate that dynamic.

Nasdaq Composite: The 200-hour moving average—the green line on the chart above—has recently provided support in the Nasdaq index. In simple terms, buyers have stepped in near that line and helped push the index higher. As long as the price remains above it, buyers retain the advantage. To strengthen that advantage, the index needs to move above its 100-hour moving average at 26,332. Beyond that, the next target is the 26,707–26,788 swing area, a zone where previous price turning points could attract sellers. Moving above and staying above those levels would add to the bullish story. Falling below the 200-hour moving average would weaken it.

S&P 500: For the S&P index, the price fell below its 200-hour moving average yesterday, which was more bearish, but found support at 7,617, the upper edge of a swing area, as shown by the yellow area and red circles on the chart below. Buyers then stepped in and pushed the price back above the 200-hour moving average, which is currently at 7,647. That recovery is encouraging for buyers, but they need to hold above that level to maintain the improved outlook. The next upside target is the 100-hour moving average at 7,702, shown by the blue line on the chart below. A move above—and the ability to stay above—that level would provide further evidence that buyers are gaining control. A move back below 7,647 would put the focus on support at 7,617 again.

For a beginning trader, the lesson is that technical levels provide checkpoints, not guarantees. Holding support gives buyers something to build on, while also showing where the market may pause or reverse if momentum fades. Breaking above the next resistance level strengthens their case and can shift attention to the next reference point. Failing to hold support tells traders to reassess rather than assume the prior move will continue.

To uncover the secret to my belief in more detail, watch the video. Feel free to comment or click thumbs up if you like it.