SPX Daily Chart Channel Breakdown H&S Pattern

Lots going on with the broad markets (SPX) the last few days after the 1597 high print last week. The SPX collapsed through the lower rail of the upward-sloping blue channel. Price came back up for a text book back test and then collapsed again. Price lost the important 20-day MA at 1563.59 which is very bearish.  The SPX lost the 50-day MA at 1543.04 yesterday. These two moving averages are important parameters moving forward. The red rising wedge, overbot conditions and negative divergence created the smack down. The red lines for the indicators are weak and bleak, sans money flow but this appears to be breaking lower as well.  The RSI, stochastics and money flow are all under the 50% level, bearish. Watch to see if the MACD crosses down through zero.  Note the strong selling volume, like rats leaving a sinking ship. The chart is very sick and it is all systems go for bears.

For the bulls, the 1540 support, the neckline for the H&S now in play, held yesterday. The H&S targets 1480-1485 if the neckline at 1540 ruptures. Price did poke down through to 1536 but the bulls at least managed a close above this critical level.  The bulls did not have the juice, however, to close above the 50-day MA. This is the first close under the 50 in four months and actually five months going back to November. If price recovers to form a more substantive right shoulder for the H&S, that would bring price back up into the 1570's. The weak and bleak indicators want to see lower lows in price moving forward after a bounce occurs. The futures are indicating a bounce to begin the day, due to the BOJ weakening the yen and pumping U.S. equity markets.  Projection is sideways to sideways lower moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.