Monday, January 13, 2014

SPX Daily Chart Upward-Sloping and Sideways Channels Gap

The SPX daily chart is a thorn in the side of market bulls since it keeps price floating along at an elevated level. The tiny green circles were highlighted a couple weeks ago. The bulls are squeezing out some more upside juice with those tiny green circles but the price action is having difficulty gaining the fuel to attack the all-time highs at 1848-1850. This chart would be better for the bears if price was actually at 1850 now since the red lines for the indicators would be displaying negative divergence guaranteeing the spank down moving forward. Currently, price is stumbling sideways through the 1824-1850 channel for one month. The purple circle shows the gap at 1818-1824 big enough to drive a truck through. Price will need to fill this gap at some point forward. The 20-day MA is 1825.05 and rising and needs a back test. Bulls win above 1850. Bears win under 1825.

The SPX weekly chart (see the previous post) wants to see price moving lower right now and for the days and weeks ahead. A move to tease the 1848-1850 area cannot be ruled out, especially today since price remains in the neighborhood, however, the weekly chart will exert its influence and the daily chart above would be expected to roll over to the downside moving forward. Initial downside target would be a test of the lower channel rail, support, the gap, and the 20-day MA, all forming a confluence of support at 1824-1826. If price comes down for a look, this would be a bounce or die decision since a move lower would represent a failure out of the sideways 1824-1850 channel. The 1838 support is important right now. Price is currently printing 1839 and change. A failure at 1838 would lead to 1832 support and a failure there would lead to the test of 1824-1825, then 1818 then 1808. 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 12:26 PM:  Whoopsies daisies. The SPX just lost 1838 support, see if this holds, or, if the bulls can recover.

Note Added 3:33 PM: The SPX collapsed through 1838 support, then 1832 (last week's low), then 1824-1825 (the 20-day MA), and now sits at the gap area at 1818 support. The 1808 level offers very strong support, also 1803. The 50-day MA is 1801.08 and rising so a confluence forms at 1801-1803 and may act as a magnet as the week plays out. The retail sector collapsed today causing much of the market negativity. If 1818 support fails, price will probably set its sights on the 1808 moving forward.

Note Added 4:07 PM:  SPX ends at 1819.20, losing 23 points, -1.3%, under the 20-day MA at 1824.04 and above the 50-day MA at 1801.12. The 8 MA stabs down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead.

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