Sunday, June 2, 2013
SPX Daily Chart Upward-Sloping Channel
We watched the red rising wedge form along with overbot conditions and the negative divergence that created the smack down. The indicators remains weak and bleak across the board wanting to see lower lows in price even after a dead-cat bounce would occur. A touch of the bottom rail is a reasonable expectation and this level directly corresponds to strong support at the 1625-1627 area. Also of interest is the bracket now formed with a ceiling at the 20-day MA at 1645 and floor at the 50-day MA at 1600. The price move out of either side will dictate the next move further in that same direction. Note the strong volume days are the sell days as the bulls that were smart and lucky to hold steady for this year's rally are jumping ship to take the summer off. Lower prices are anticipated with a potential bounce occurring from 1630, 1626, 1618, 1614 or 1597-1600 moving forward. The 1625-1627 support level is an attractive place for the SPX to bounce from for a day or two before resuming the downside. A move straight down to test the 50-day MA this week is on the table. 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.