Friday, August 15, 2014

SPX Daily Chart Fibonacci Retracements

The bulls keep a solid relief rally moving higher ever since Putin's soothing words last Friday morning one week ago at this time. In five days, the SPX moves from under 1910 to above 1955, 45 handles of upside,+2.4%; the stock market is moving up at a rate of +0.5% per day for the last week. Interestingly, the red lines for the indicators at the price bottom are weak and bleak and technically wanted lower lows in price, however, the Putin comments override in the VST. Money flow remains weak but the other indicators are long and strong in the VST so higher highs in the SPX would be anticipated say into early next week.

The showdown should occur at the strong 1960-1961 horizontal support. Note that price closed exactly between the 50-day MA at 1956.77 and 20-day MA at 1952.83. The move from this bracket identifies the winner moving forward and S&P futures are +5. The 38% and 50% Fib retracements for the move down from 1991 to below 1910 are taken out. The 62% Fib is 1958.35 so a strong gauntlet of resistance is in place at 1957-1961. If 1961+ occurs, the bulls are likely headed to all-time highs in the stock market. The bears remain in the game if they maintain price under the current 1955-1957 level. The battle continues at 1957-1961.

The volume for the up days is not impressive and the rally is a Putin news-driven rally since stocks popped yesterday on a further conciliatory tone by Putin. However, as soon as the news bite hits that Putin rattles a sabre, stocks may reverse just as quick. For now the bulls are cruising as the fight begins at the 1957-1961 resistance gauntlet. 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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