SPX sold off Friday and I prematurely stated that the top "may be in". Well, by the end of the day the fast down move from futures had been mostly erased - another example of the "never trust fast moves" rule.
The SPX futures ended with a hanging man candle, so further selling into Monday or Tuesday is certainly possible, but with the slow stochastic fully embedded, chances are 3900 will continue to hold. If we breakdown and start holding under the weekly 18ma at 3920, I will turn more bearish.
More than likely we will keep grinding up to 4130-60 area which is the confluence of a number of technical points - Daily BB, 50 weekly ma, .50 Fibonacci from the top, and the uptrend pitchfork's median line.
At that point, I'm starting to wonder if we just start heading down again and not have any further up move. A similar weekly bull divergence was was good for a 10+ percent rally in 2008, which I covered in this October post -
We are now 17 percent from the lows in October from "moderate" weekly bull divergence. The question is "if" we hit the median line on this pitchfork (and everything else that aligns with that area), would that be the top of the counter trend rally and then we go down to new lows into 2023? It's very possible and I'm starting to lean that way. I was thinking we would pullback first for a B wave and then hit the median line later at a higher price, but that theory is looking less likely as of today.
So, let's take it one day at a time, but ultimately, above 4100 is a number of technical reasons to try a short. We shall see soon enough if/when we get there.
Good luck for this week!
The SPX futures ended with a hanging man candle, so further selling into Monday or Tuesday is certainly possible, but with the slow stochastic fully embedded, chances are 3900 will continue to hold. If we breakdown and start holding under the weekly 18ma at 3920, I will turn more bearish.
More than likely we will keep grinding up to 4130-60 area which is the confluence of a number of technical points - Daily BB, 50 weekly ma, .50 Fibonacci from the top, and the uptrend pitchfork's median line.
At that point, I'm starting to wonder if we just start heading down again and not have any further up move. A similar weekly bull divergence was was good for a 10+ percent rally in 2008, which I covered in this October post -
We are now 17 percent from the lows in October from "moderate" weekly bull divergence. The question is "if" we hit the median line on this pitchfork (and everything else that aligns with that area), would that be the top of the counter trend rally and then we go down to new lows into 2023? It's very possible and I'm starting to lean that way. I was thinking we would pullback first for a B wave and then hit the median line later at a higher price, but that theory is looking less likely as of today.
So, let's take it one day at a time, but ultimately, above 4100 is a number of technical reasons to try a short. We shall see soon enough if/when we get there.
Good luck for this week!
Comment:
Good morning, futures have a little sell off but nothing major yet. 200 ma is at around 4040 on spx cash, so they may test that before going higher. A close under the 200ma would be interesting for bears.
Comment:
MA support directly under where we are. A quick sell at open would get down to test the area.
Comment:
200 ma reached on cash session, bulls want to hold this, otherwise we go to 18ma again
Comment:
IWM and DJT both very weak today - may be a warning
Comment:
SPX is under the 200ma, bulls tried to defend it but so far failed.
Comment:
SPY lost it's embedded slow stochastic status and is now under the 200ma, they are trying to hold the 10ma, but I think the target is the 18, at 398. From there bulls need to make a stand otherwise bias on the daily will be down.
Comment:
IWM now under a cluster of MA's and may be leading to the downside. ANy bounce will find resistance at that cluster of 200,10 and 18ma. I think this is probably the best short on any bounce.
Comment:
now under the 18ma, a close below and the bias becomes negative, Lower BB may be the target near 3900
Comment:
expecting a bounce tomorrow but I'm starting to think Friday was a bear trap and then bulltrap
Comment:
if 18ma is lost look for 3940 to be support
Comment:
if 18ma is lost look for 3940 to be support
Comment:
we are coiling at smaller time frames, at open we may pop up but I think many are expecting that, so it could be we just sell down hard to 3940 area.
Comment:
we're getting close to the shelf of support but it could get down to 3900 if they push hard.
Comment:
18ma has been lost, bias is now down. A bounce to test it in a day or two would be a short opportunity
