While the MACD and Stochs now provide for a bounce opportunity, as well as still being in the channel, things don't look good for the market right now.
We are below all moving averages on the daily and they are starting to curl over.
The market now needs a ripper of a bounce.. if we just hang down here or just go ahead and break lower it will only leave this market a couple areas of support. 1140-1150 and 1120.
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Key Levels
Upside -- 1200-1207, 1222-1230, 1253-1269 (lots of strong resistance now above us)
Downside -- 1182, 1150, 1121
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SPX Daily;
Here is our channel. I had to adjust the channel slightly from yesterday and draw it at the steepest angle possible in order to keep us inside on the close.
I have a personal habit of adjusting when possible in a way that allows the oposing position from what I currently think, the highest chance of success. In other words, I will always make an attempt to adjust the chart, IF POSSIBLE, if it will allow for a set up that is the opposite of what I think the market is going to do.
In this case, I think we are going lower short term. I adjusted my channel allowing for todays close to still be inside the channel. It was possible to draw it that way, so I did.
This keeps me honest.
That said, the market cannot go much lower here without really breaking down lower.
If it breaks below this channel and stays there, there's only a couple levels of support and they both occur after large gaps lower.
1121 is still our critical level as far as whether this market still has a holiday rally left in it to head into next year.
Things are beginning to not look good for it here. Large impulsive sell offs and beginning to string together down days. Being below all the moving averages again on the daily is also a bad sign.
What happens next is critical. We will either bounce hard from here soon or we could immediately break lower or we could flounder around here til next week and then break lower. Both of the latter options are not good for the market. The market needs a strong rally to appear soon.
GL
CJ
2 comments:
How much do you consider after hours futures trades in your charting. I realize that you're charting SPX, but do you think AH means anything technically? I ask because /ES is of about 15 points after the close, and because we got a rather large spike down immediately after the close.
sorry, this is a bit late of a reply.. but I really dont pay much attention to after hours.
in fact, i view an after hours plunge or mega rally as a gap that will have to be filled at some point.
I don't put a lot into intra-day highs and lows either.
I do put a lot into closing levels. Especially closing on a low or a high.
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