Stocks are moving lower down through the downward-sloping channel. Price is testing the lower rail of the channel and will bounce or die. It started to bounce late in the day yesterday. S&P futures are up +5 with the VIX remaining elevated at 32.57. Price teased a low from earlier in the month and may want to come down there again (thin purple line). The indicators are setting up with positive divergence (green lines) but the MACD line remains weak and bleak. The MACD wants another lower low and at that time may set up with possie d, so in a couple hours or so.
The RSI is not in oversold territory so that hints at further weakness ahead. The news flow concerning the spreading pandemic, fiscal stimulus deal and election theatrics is in the mix. Stochastics are slightly oversold agreeable to a bounce. Price likely needs to come down once more before bouncing in this 2-hour time frame due to the MACD. Support is at 3360-ish, then 3330-ish and 33 hundo.
That 3300-3330 gap is big enough to drive a truck through. The SPX will either want to come down to fill that gap, or, come down to 3330, play around for a little bit, then whoooosh, flush down to 3300 in a heartbeat and then collapse lower from there creating an island reversal (gapping back down through the gap). The SPX placed itself on an island when it gapped-up at the end of September to 3330. To be most technically accurate for the island pattern, price should have a couple more touches this month at the water level at 3330 but its close enough for government work. 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.