In the end though, we took out 3 levels of yesterdays mentioned support.
I present the first chart, SPX daily / 5 month;
As you can see, we tried to rally, got rejected by the mid-bollinger bands, then proceeded to sell off and actually closed below both the 50 and 100 day moving averages. While it didn't feel all that impressive, that late day sell off was quite damaging to the market. Losing the 50/100 is big. Bulls need to regain that asap.
Another thing the bears should like about today, we didn't leave a big gap on the open. Gaps always close, so a bear that wants to see a sustained selloff, ideally will not want to leave big opening gap downs without them closing intra-day.
Lets take a look at the hourly;
We broke below what was a potential bullish falling wedge. Now its a bearish falling wedge that's broke. As mentioned yesterday, it appears we will test that channel soon at 1304 (rising slightly). If we drop back into that channel.. then we have a big area of support at 1290-1295. Breaking below 1290 will invalidate some Elliot Wave counts that are bullish because a wave 4 cannot invade wave 2's space.
As mentioned yesterday, we are oversold on the hourlies, so a bounce can happen at any time. And as mentioned yesterday, we have a pattern recently of oversold or overbought conditions just continuing to become extreme versions.
Another chart for tonight, the Russel 2000, it's in a huge megaphone pattern, here's the Russel on a 7 month / daily;
That's a big megaphone. So now we have an 5 month old head and shoulders possibly forming in the SPX and we have a nearly 7 month old giant megaphone in the Russel.
The transports have also taken a real hit the last couple days.
The futures are positive at the moment. If the SPX can get back over the 50/100 and stay there tomorrow, it has a chance to put in a bottom for what would likely be a wave 4 and a final rally will occur. If the SPX doesn't recapture the 50/100 tomorrow, I think we have a date with 1290.
GL
CJ
4 comments:
Look like we'll stay over the 50/100 CJ. Rip higher? 1370 seems doable this month. Perhaps with ease.
it must CLOSE back above the 50/100.
If we have a late day sell off or something and close back under, that would be very bearish.
If we hold up here, I would read that as bullish and new highs would be likely.
Don't think that'll be a problem CJ. Charts don't take into account QE-3 do they? LOL. Just kidding. I actually think we'll print 1300 on the SnP's this month.
I'll just say this... there's every reason to believe we'll close up here and probably go to new highs.
but.. I would not be even the slightest bit shocked if we close way down off this high or even red today.
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