Monday, May 5, 2014

SPX Daily Chart Head and Shoulders Patterns

A couple of H&S patterns are in play. The brown H&S targets 1773 if the 1835 level fails and the purple H&S targets 1733 if the 1815 level fails. The RSI and stochastics are moving through a sideways vibe. S&P futures are down -7 on Monday morning ahead of the new week of trading but the MACD line and money flow shows near-term lift remaining. The RSI, stochastics and histogram are agreeable to price moving lower. So today's weakness may lead to a recover rally  and the sideways vibe continues. By mid-week the indicators should line up with negative divergence across all indicators.

The 20-day MA at 1862.46 slips under the 50-day MA at 1862.72 which is a bearish development. Watch to see if this negative cross is maintained, or not. The chart is a toss-up indicating sideways movement through the S/R levels at 1897, 1891, 1884, 1878, 1874, 1868 and 1859. With a projected drop of about 6 to 9 SPX points at the opening bell today this places price, starting at 1881, at 1872-1875 so a test of the 1874 and 1868 support levels is likely on tap where bounce or die moves will be required.failure at 1868 will then target 1859 support. 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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