SPX 2-Hour Chart Sideways Channel

Stocks fell out of bed yesterday. Note the last four candles which takes the price action back to this time yesterday at 2042-ish. The sideways blue channel at 2002-2061 is in play thus far this year and price sits at the bottom support at 2002-2003 deciding to bounce, or die. Key SPX S/R is 2018-2019, 2011, 2002-2003, 1998, 1996.52 (key 150-day MA), 1993 (this year's closing low), 1988, 1985-1986, 1982, 1981.82 (key 10-month MA), and 1978. The importance of the 150-day MA cannot be overstated. Look at a daily chart with the 150 MA and you will see important price touches in October and important support levels in December and two weeks ago. The stock market goes down the rabbit hole if the 150-day MA at 1996.52 fails.

Another key level the old-timer's follow is the 10-month MA at 1981.82. The 1982 support level is the 'last chance corral' for bulls. If 1982 fails the SPX is likely headed to the low 1900's next. The indicators are weak and bleak (red lines over the last few hours) wanting to see lower lows after any bounces occur. Price may place a near-term bottom in the 1988-1998 area. The SPX will bounce or die from this 2002 level. 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 9:48 AM: It died. The SPX drops to 1993; this is the closing low of the year thus far so time to bounce or die again.

Note Added 9:59 AM: SPX prints a LOD at 1992.53 and bounces displaying the strength of the 150-day MA support. As mentioned above, the game changes if the 150-day MA fails; markets will turn very ugly quickly. The bulls send price back up to 2001 so the SPX will back kiss the 2002-2003 resistance for a bounce or die decision. Watch the support/resistance levels listed above to gauge the strength of the price move in either direction.

Note Added 10:05 AM: Here is the back kiss of 2002-2003 resistance with price at 2002. Bounce or die. If price dies, a retest of the critical 150-day MA at 1996.54 is likely on tap. Did Keystone mention how critically important the 150-day MA is? Also watch the LOD at 1992.53; note how price bounced off the 1993 which is the closing low for the SPX thus far this year. Of course more negativity would be expected if the 1993 fails. Failure at 1993-1997 will create market mayhem. Bulls must keep the SPX above 1997 or they are in serious trouble.

Note Added 7:53 AM on Friday morning, 1/30/15: The bulls started pushing lower but could not produce a sustainable breach of the lower levels discussed above. Just when the markets were going down the rabbit hole, as usual, the Fed steps in with jaw-boning. Fed Chair Yellen was speaking to Senators, providing a wink and a nod, nudge, nudge, know what I mean, know what I mean, where she said intrest rate hikes are a long way off. Bingo. Instant market recovery. The central bankers are the market. Stocks also continue to move in sync with the dollar/yen and oil. Oil dropped midday taking stocks lower and then late-day oil recovers providing the boost in stocks into the closing bell. The SPX ends at 2021 with a HOD at 2024.64. Key S/R is 2061, 2046, 2040, 2038, 2032, 2018-2019, 2011, and 2002-2003. So price is playing around between the 2032 resistance and 2018-2019 support, thus, bulls win above 2032 and bears win below 2018-2019. S&P futures are weak in the overnight session projecting a loss at the open for the SPX of 6 to 12 handles. Price should fall through the 2018-2019 S so watch to see if the 2011 support holds, or not. The SPX 2-hour chart above wanted another price low yesterday due to the indicators remaining weak and bleak as price printed the low candlestick, however, Yellen's dovish talk created the big bounce as always overriding technicals and fundamentals. The chart is not tipping its hand now and needs to print a couple candlesticks to provide hints. The SPX looks set to explore the 2011 S and perhaps 2002-2003 support so there will be bounce or die decisions needed at these levels.