The expansion pattern is in play with price wanting to bounce from the lower trend line. The top trend line of the expansion pattern is dropping and in the 1910-1925 area. The lower band violation wants to send price back up to 1915-1923 at a minimum (the middle band). If more time passes, the middle band may drop from the 1923 into the 1906-1910 area to form a confluence with the moving averages and create a strong ceiling for price. Bulls first need to recover above the 50-week MA at 1888 or they got nothing. The bottom is in when the MACD line positively diverges perhaps around lunch time. 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 11:20 AM: Price runs higher overtaking the 50-week. The 12-month MA is at 1894.63, call it 1895, and is the major line between a cyclical bear market and cyclical bull market for the months ahead. Price is at 1893. The stage is set. The HOD is 1893.49 thus far. The MACD line is flat now on the 2-hour chart positively diverged (no longer going down) so the bulls are gaining some gusto for a relief rally higher. Do not rule out one more look at the lows at 1876-ish before the upside rally locks in. The importance of the 12-month MA cannot be understated and is the most important parameter to watch since it tells you the answer for both the short term and long term. The 1895 level decides who wins going forward.
Note Added 3:14 PM: The SPX dances to and fro today, teasing up to 1899, then down to 1878 where it was at after the opening bell. So price could not overtake the critical 12-month MA at 1895 (price was only above for less than one-half hour and failed) so it was spanked down to the 50-week MA at 1888 again. This support fails, price drops, then returns for a back kiss at 1888, and collapses 10 handles. You can see the MACD line curling down to the same level as 3 candlesticks ago, about 6 hours, so this is the move back down to test the lows again. The same analysis should hold above and the SPX should be placing a bottom into the closing bell or after the opening bell tomorrow.
Note Added 3:20 PM: Here's the SPX down for that low. LOD 1871.79. The MACD line is a touch lower but the other indicators are positively diverged. Hourly charts look good for the bounce. Keystone bot SSO as a quickie long trade for the anticipated bounce coming due to the SPX hourly charts positively diverging. This is a very dangerous and speculative trade which will attempt to scalp the bounce. TICK prints uber low -1200 so big bounce on tap.
Note Added 3:29 PM: The possie d is sending the SPX higher. SPX springs up to 1877 six handles off the bottom in five minutes.
Note Added 3:33 PM: The SPX 30-minute chart is positively diverged across all indicators so it wants the bounce and move higher. Ditto the 1-hour chart. Ditto the 2-hour except for one tiny hair in the MACD line so she is very close if not placing the bottom. There is an overbalance of sell orders that still need paired off into the bell so these are sending price lower again.
Note Added 3:35 PM: Everyone is concerned about another drop into the closing bell still 25 minutes away but if they can rectify the sell orders everyone may be surprised at a rally instead. The 50-week MA at 1888-ish and 12-month MA at 1895-ish remain key. Keystone bot more SSO. The overall weekly trend in stocks remains lower (price will likely be lower than now a few weeks out) but in the very short term, the next day or three, stocks may bounce according to the hourly and minute charts, hence the SSO trade.
Note Added 3:41 PM: The MACD line on the SPX 2-hour chart is now flat over the last few candlesticks which is positive divergence with the lower SPX price so all the ducks are in a row and it looks good for upside from here for the countertrend rally to begin. Still 20 mintues to go.
Note Added 3:43 PM: SPX up to 1881 ten points off the low. If the countertrend rally begins it should only last a day or three and would be susceptible to any bad news occurring from any of the trouble spots around the globe.
Note Added 3:53 PM: TICK prints +1000 so SPX jumped up too fast and should soften. SPX 1881. INTC earnings are on tap after the bell.