Wednesday, February 17, 2016

SPX S&P 500 2-Hour Chart

The 2-hour chart is sporitng a potential W pattern bottom. The blue W would target 1930-ish. Key S/R for the S&P 500 is 1978, 1973, 1965, 1961, 1951, 1942-1943, 1924, 1897, 1884, 1878, 1874 and 1872. Price is at 1918 teasing towards the 1924 resistance for a test.

The brown lines show the inverted H&S pattern from a January into early this month that failed. Price broke above the 1905-ish neck line but collapsed back below, then back above for another breakout, then back below, and then failed to hold the support at 1875-ish and collapsed. The inverted H&S was nullified. The SPX then forms the W pattern which is a bullish pattern.

The indicators are long and strong except for the stochastics that are overbot and wanting price to pull back for a rest. The other indicators want price to make more highs after any pull back occurs in this 2-hour time frame. The RSI has not reached overbot territory as yet so that is on the table. It will likely take from 2 to 4 candlesticks for the indicators to roll over with neggie d as price squeezes out new highs which represents 4 to 8 hours of trading time, at a minimum, which is well into tomorrow for the potential market top to set up.

Price violated the lower standard deviation band (pink) so a move back to the middle band and the upper band is on the table and voila, in a heartbeat, both occur. Price has now violated the upper band so a move back to the middle band, the 20-day MA at 1863, and rising, is on the table.

The W pattern target and the important resistance levels are in the 1924-1942 range so this may be the target in the near term for the top. The NYMO is up to +30 and may move above +40 today to indicate that a market top is at hand so things are coming together. As a guess, the stock market may top out anytime between Thursday and Monday. Each passing hour provides new information to hone the analysis. 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 8:30 AM EST: The SPX prints a HOD at 1931 and closes at 1927. Price took out the strong 1924 resistance which is now support. The 1942-1943 serves as overhead resistance.

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