Friday, December 13, 2013

SPX Daily Chart Sideways Channel Breakdown H&S

The SPX loses the brown sideways channel at 1782-1808 that was in place for the last month. It is reasonable to expect a back kiss of the 1782-1783 resistance since it is such a key S/R level for the last few weeks. The blue H&S is in play with head at 1814, neck line at 1782, which targets 1750 now that the 1782 failed. The rising wedge breakdown occurs as expected in late November. All the indicators are weak and bleak with no signs of positive divergence. The RSI, money flow and stochastics are all under the 50% levels in bear territory. This behavior hints that any market bounce should be a dead-cat bounce and further downside would be expected moving forward. The RUT lost its 50-day MA so it may be leading the other indexes lower to test their 50-day MA's.

A day or two dead-cat bounce may occur but traders will likely short the rallies. Watch the important 1782-1783 resistance above. If price moves above 1783, the bulls got some recovery game and they will likely move higher to back kiss the 20-day MA at 1793-1796. The bears will be celebrating into the weekend if they maintain the SPX under 1782. Projection is sideways to sideways lower moving forward with the 1745-1760 zone the next downside target. 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.

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