Monday, January 25, 2016

SPX S&P 500 30-Minute Chart Sideways Channel Potential Inverted H&S Patterns

The SPX 30-minute shows a couple of interesting potential inverted head and shoulders (H&S) patterns. The brown inverted H&S has a head at 1815 and neck at 1890 so the target is 1965 if the 1890 is violated to the upside which it currently is. The blue inverted H&S shows the head at 1815 but a neck line at 1900 which targets 1985 if the 1900 level is violated to the upside.

The SPX is staggering sideways through the purple channel at 1890-1910. So bulls win big above 1907-1910 and bears win big under 1890. If price drops under 1890 the potential inverted H&S patterns would become meaningless. Price must make a decision. A breakout above, or break down below, will likely determine the near term direction forward. The indicators are not tipping their hands. The MACD line would like another look at the 1890-ish in this 30-minute time frame but the 2-hour chart hints that a move back to the 1907-1910 upper channel boundary is on tap. 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 1:12 PM:  The SPX floats higher to kiss the 1900 level exactly in the middle of the sideways 1890-1910 channel. The drama continues.

Note Added 8:09 AM EST Tuesday Morning, 1/26/16: The bears pushed the SPX down to the bottom of the channel at 1890 then boom, the bottom fell out. Price drops to fill the gap shown by the blue circle. The SPX ends yesterday down at 1877.08 with a LOD 1875.97. The 30-minute is worth watching going forward since the chart may continue to morph into an inverted H&S pattern with a potential neckline at 1907. If 1907 gives way to the upside, 2000 would be targeted by the inverted H&S pattern. For now, the bears continue pushing stocks lower with S&P futures a hair positive before the Tuesday opening bell. The bottom of the gap fill is 1867 which is also strong price support. Very strong S/R levels are at 1897, 1884, 1878, 1874, 1872, 1867-1868 and 1848. The SPX begins Tuesday at 1877 stopping at the strong 1877-1879 support. If the strong 1872-1874 levels fail, price will likely collapse through 1867-1868 like a hot knife through butter and seek the very strong support at 1848-1849. Bulls need to push up through the 1877-1879 resistance which will shoot price upwards to test 1884-1885 for a bounce or die decision. A bounce takes price to 1897 next. Stocks may be buoyant into the Fed decision tomorrow afternoon. Stocks are moving lockstep with oil prices. As oil goes, so goes the markets

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