Monday, September 30, 2013

SPX Daily Chart Gap S/R

S&P's are set to drop a dozen points or so at the opening bell. The 50-day MA is 1680.18 so watch this like a hawk since price will try to seek support here. The brown support line on the chart is 1685 so the 1680-1685 level is an important support gauntlet. Bears win big sub 1680 while bulls will be happy above 1685. The 1685 also satisfies the need for a back test of the 20-day MA at 1684.74. The brown lines highlight the key S/R at 1691, 1685, 1669, 1657, 1652, 1649, 1639 and 1627.

The negative divergence and overbot conditions created the spank down as highighted about one-week or so ago. The indicators remain weak and bleak although the money flow is trying to create positive divergence. With the weak opening on tap today, the money flow will become weak and bleak as well. This hints that price will seek lower lows even after a bounce occurs. The stochastics are slicing under the 50% level into bear territory. Watch to see if the RSI loses 50% today which would create further negativity. Today will be interesting to see where the dip-buyers want to give it a go. Traders remain complacent and bullish, as evidenced by the low put/call ratio's highlighted over the last couple weeks. Markets are not climbing a wall of worry, instead, markets climb a wall of Fed (easy money). There is a big gap at 1671-1674 that price will want to fill at some point forward.

The chart wants to see continued weakness moving forward. Watch the following support levels for a potential near-term recovery bounce; 1685, 1680, 1674, 1671, 1669 and 1657. 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.

Note Added 7:01 AM on 10/1/13:  The SPX dropped to a LOD at 1674.99 and bounced. The day ended at 1682. Lots of action around the 20-day and 50-day MA's so these levels are important moving forward.

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