Tuesday, June 9, 2015

SPX 2-Hour Chart Lower Band Violation

The RSI, MACD line and money flow remain weak and bleak in the 2-hour time period wanting to see lower lows in price after any bounce occurs. The 1-hour chart is set up to bounce so meshing the two together indicates that a bounce may occur today in stocks but weakness should reexert itself as the day plays out. The chart above needs at least one to three candlesticks of time to produce positive divergence in the indicators to create a substantive rally which is 2 to 6 hours of trading time which easily takes up today and perhaps into Wednesday morning.

The RSI is in oversold territory and will seek a recovery move moving forward. Ditto the stochastics that will want to see price move higher. The histogram and stochastics positive divergence meshes with the 1-hour chart and will help create a bounce in price. Price is violating the lower band so a move back to the middle band, at a minimum, at 2100 and dropping, is on the table.

The brown lines show the ongoing sideways channels through 2076-2035 and more tightly, 2091-2121. The SPX lost the 100-day MA at 2085 yesterday and the 150-day MA is at 2072. The 50-day MA is at 2101. The 20-week MA is at 2089. Key price support/resistance is at 2108, 2091, 2081, 2076, 2067, 2061 and the starting year number at 2059.

Thus, for Tuesday price should stage a recovery bounce say to the 100-day at 2085 and potentially the 20-week at 2089 and price resistance at 2091; call it 2085-2091. The indicators in the 2-hour chart want to see further weakness so the downside targets perhaps for this afternoon and/or early tomorrow are price support at 2076 and 2067 and the 150-day at 2072; call it 2067-2076.

As always, the central bankers control the stock market so if any of these money printers talk happy talk stocks can rally at anytime; ditto if a Greece solution is announced. S&P futures are -3 about 90 minutes ahead of the opening bell. 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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