SPX Daily Chart Fibonacci Retracements

SPX daily chart shows how the huge Friday move stopped directly on top of the 62% Fib retracement at 1362-1363. This is a critical area for price since the two prior Fib's, at 38% and 50%, were broken to the upside. The market bears must make a stand in this area otherwise a continued beating will occur as the SPX moves onwards and upwards above 1370. Reference the SPX S/R missive for the important support and resistance levels.

The green lines show the strong positive divergence that bounced price to start the month of June. Note that the MACD line, however, printed a lower low which hints that price needs to come back down to test the 1270-ish area again in the future.  The red lines over the last two weeks show a higher high for price with negative divergence across the board except for the MACD line that wants to see another high before the negative divergence can form universally for a more substantive down move.

With the Friday thrust, this type of momo needs to burn off so a topping move would be in order with a stutter step, down-up, move. This may properly line up the MACD line with negative divergence. Watch the RSI, now bullish above 50%. If the RSI takes out the high from two weeks ago this will lead to further upside for price moving forward. Use 1370-1372 as a line in the sand, bulls need to move above to firmly set in place a sustainable summer rally move, bears need to spank price down from here to prevent any further upside. 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.