Tuesday, September 1, 2015

SPX S&P 500 Daily Chart Sideways Channels

The 2-hour chart is sly not tipping its hand. The idea from the last chart was to watch negative divergence form with the red lines to forecast a market top, which occurs, however, the MACD line remained long and strong sloping higher with price already rolling over. That hints that price will want to come back up. The indicators are weak and bleak but stochastics are oversold so the SPX should bounce. The SPX may need 2 or 3 candlesticks before printing positive divergence for an upside move so that would take up the bulk of tomorrow's trading. Perhaps it takes stocks into the Beige Book on Wednesday afternoon where stocks make a decision.

The wide sideways channel is through 1872-1998. The tighter channel is 1889-1988. Key S/R is 1951, 1942, 1928, 1924, 1897, 1889, 1884, 1878, 1874, 1872 and 1848. The SPX begins Wednesday trading at 1914 so bulls win big above 1924 and bears win big under 1897. The LOD on Tuesday is 1903. The failure at 1924 is an air pocket to 1897 support and price sure did fall into this air pocket. Price may want to come back down to test 1897 after any bounce occurs. Projection would be for stocks to find a base and move higher beginning anytime Wednesday using seasonality bullishness and bullish put/call ratios to helps stage a rally into the holiday weekend.

S&P futures are +15 on Tuesday evening but if this holds and a bounce occurs, the SPX may want to come down to test 1897; that may be where the indicators establish positive divergence to allow a stronger bounce. Price may establish a sideways triangle pattern going forward where the directional decision out of the triangle be it up or be it down occurs on 9/17/15; the date of the Federal Reserve rate decision when Chair Yellen brings the tablets down from on high to tell global traders how to trade. 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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