SPX 2-Hour Chart

The fight over the last couple weeks was the bullish ascending triangle versus the bearish red rising wedge. The patterns compete and late last week the bulls break out above the triangle base line at 1990 and throw confetti to celebrate the upside which would target 2110, but alas, the bears spank price down from the 150 MA resistance on the 2-hour chart. The red lines show the negative divergence with the indicator that occurred when price spiked which sealed the negative fate for the upside. On a breakout you want the indicators to be long and strong not turning over with neggie d.

So this week the bears win with price collapsing out the bottom trend line of the red rising wedge. Bears throw confetti to celebrate the break down. The collapses from rising wedges can be quite dramatic and a move down to potentially retest the August lows could easily occur due to a rising wedge pattern.

The indicators are weak and bleak so after any bounce price will want to make new lows again in this 2-hour time frame. The RSI is flattening and stochastics are oversold so stocks may be able to find a base and recover in a few hours time. Watch for when the MACD line turns positively. Price is using the support from last week to hold the line at 1941-ish, for now. if this 1940-1941 level fails, price will target the gap fill (tiny circle) at 1925-ish and the support at 1910-1920. Stocks are chopping sideways which is action that chews up bulls and bears alike. It is usually best to do a lot of patient watching in this type of whipsaw action.

By the time Keystone finishes this wind-bag commentary, the SPX drops to 1938, losing that critical support level from last week, check that, now sporting  a 1937-handle. 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 10:39 AM: SPX LOD is printing right now at 1935.01. The top of that gap fill is at 1928-ish.

Note Added 10:45 AM:  The TRIN Arms Index spikes to 3.74 displaying uber negativity and bearishness so this will only set up a market bounce probably tomorrow. This hints that choppy sideways markets will continue a couple days. With the high TRIN reading, buying some index longs this afternoon may be prudent to ride a pending rally say tomorrow due to the high TRIN reading that is printing today. SPX is at another LOD at 1933.02. The gap is only 5 points away.