$SPX Daily Chart

SP:SPX   S&P 500 Index
724 3 7
When breadth indicators get oversold, like they were Wednesday, and the market doesn't bounce, then this is new behavior and a possible tell going forward. P/C Ratio closed at .70 today so everyone is expecting a bounce for tomorrow. Maybe they'll get it but it would have been better had the P/C Ratio closed at 1.10 or higher. Always a concern when everyone's on the same side of the boat.

On the daily chart , the 9EMA has now crossed decisively down through the 20MA in the first stage of fresh 'sell/avoid signal.

DI lines had bearish cross Wednesday and because $SPX             closed below Wednesday's low, then we have a confirmed 'sell/avoid' signal using Wilder's ADX .

The mid-line support on the monthly $SPX             chart I put up over the weekend is in the area of the 50MA on the daily chart and also in the area of the next major support level at 1746.20. Don't know if we'll even get there but if we do I wouldn't want to see this fairly large support area fail to hold.

Market isn't likely to go straight down. Never does. But I'd be cautious placing too much confidence in a snap-back rally which may prove to be a suckers rally instead.

Thank you for sharing!
Thank you for your posting. I trade the ES and appreciate seeing other people's point of view. I strongly agree with your last line about a possible "sucker's rally". On ADX I think most traders count crosses as signals when DMI is above 20 and Wilder suggested 25.
CurtisM OldGoat
Old Goat, when the ADX line rises above 30 and then afterward you get a bearish or bullish cross of the DI lines, then Wilder's gives a better signal. When the DI lines are traveling in a narrow range, Wilder's doesn't appear to work as well, as your comment suggests. Other traders will wait for the ADX to rise up and cross up through the falling DI line as another confirmation of a current potential 'buy' or 'sell' signal. It doesn't appear that that is going to happen today with the ES up 9pts at 9:10 am.

Thanks for your comments. GL
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