Friday, April 25, 2014

SPX Daily Chart Fibonacci Retracements Potential Diamond Pattern

The SPX continues sideways through 1820-1890 for almost three months and more specifically 1840-1890 for the 2-1/2 months. Key S/R is 1897, 1891, 1884, 1882, 1878, 1874, 1872, 1868, 1859, 1855, 1848-1849, 1841, 1831 and 1828. The 20-day MA is 1862.75 and 50-day MA is 1858.49. April began at 1872.34. There are only three days remaining in the month to determine a positive or negative month. The year began at 1848.36. For the big rally in February-March from 1740 to 1897, the 50% Fib retracement was 1815 exactly where the bounce occurred two weeks ago. For the rally from 1815 to 1883 over the last few days, the red lines show the Fibonacci retracements. The 32% Fib is 1858, 50% Fib 1850 and 62% Fib 1842. Note how the Fib's line up with the S/R above so this creates strong magnets for price at 1858-1859, 1848-1850 and 1841-1842.

The red lines show the negative divergence and rising wedge for price that created the top and spank down to begin April. Price is consolidating sideways currently and hinting at a diamond pattern. If a diamond, price will drift down towards 1830-1850 then back up to 1850-1870 then be at the right edge of the diamond at 1850-ish for a critical up or down decision in May. Note the selling volume days far outweighing any bullish days. Equities are tired and running out of gas. The brown circles for volume clearly show distribution taking place with the so-called smart money handing off the bag to Joe Sucka. This is why the hype on television is maintained so funds can pump and dump stocks to the greatest extent before markets roll over.

Equities remain weak as this article is written. The SPX is 1870.39 down 8 points on the day. Watch the support at the 20-day MA at 1862-1863 since if this is lost price will likely accelerate lower. A test of the first Fib retracement at 1858-1859 should be in play. Overall, the projection is for sideways to sideways lower stocks for the weeks and months to come. 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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