SPX Daily Chart Upward-Sloping Channel Bottom Rail Test Falling Wedge Developing

The SPX continues to show indicators that are weak and bleak (red lines) wanting to see lower lows after any bounce would occur.  Watch the RSI to see if the 50% level fails which would provide further bear fuel. The red falling wedge is targeting the 1618 and 1614 levels with the apex near the critical 1597-1600 support. The chart shows the drama over the last three days at the critical 1626-1627 support which is also the bottom rail of the upward-sloping blue channel.  The bottom rail has been tested seven times since the start of the year and held every time. Is the eighth time the charm for bears?

The dollar/yen dropped under 100 overnight and is now at 99.60 with the S&P futures down -5.4. Use this as the gauge forward. At this juncture, the SPX will likely test 1626-1627 support again at the opening bell. This failure will send price to 1618, then 1614, then 1597-1600. Since the indicators remain weak and bleak, there is some comfort that lower prices will occur despite any bounce so maintaining the short side is at least somewhat less worrisome. SPX bounce levels may be from 1618, 1614, 1597-1600 and/or 1593. Thus, scale-ins for the long side for a potential upside bounce can occur at these levels. Projection is lower prices in the daily time frame until positive divergence develops. The dollar/yen dictates the action; today will either be Banzai!, or, hari-kari. 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.