SPX Daily Chart Lower BB Violation Head and Shoulders

The red rising wedge, overbot conditions and negative divergence spanked the SPX down four days ago. Two key outside reversal days have occurred in the last five days. See how the red candles printed higher highs intraday, then lower lows and closed below the prior days low. The pink lines show an H&S in play with head at 1531 and neckline at 1495, so target at 1459. The 1459-1465 zone is an interesting potential landing area. The lower Bollinger Band was violated at 1490. Interestingly, note how both the upper BB and lower BB are expanding after the tight squeeze. The tight squeeze creates the down move and lower prices can continue with the lower BB dropping sharply lower to allow price to explore some slightly lower numbers. However, since the lower BB is violated, a move back to the center BB, the 20-day MA, at 1510.72 is now on the table.

The indicators are weak and bleak indicating a preference for lower numbers to print moving forward. The RSI and stocastics fell under the 50% levels which is bearish.  Watch to see if the money flow loses the 50% level. The 50-day MA is 1476.72 and will likely see lots of action in the days ahead.  Looks like a dead-cat bounce is on tap today, then more downside. 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.