SPX 2-Hour Chart; Sideways Channel

Every day is drama in the Whitehouse as well as the markets. The red lines show the rising wedge, neggie d and overbot conditions creating the expected spankdown but the Federal Reserve rides to the rescue as usual creating more oomph in equities. The maroon lines forecast another top with the rising wedge, overbot conditions and neggie d and price is spanked down again but the drastic fall in the US dollar index creates another recovery for the SPX.

Price is stumbling sideways now and impacted by the dollar weakness. The lower dollar sends commodities and oil higher and the corresponding commodity, oil, and energy stocks higher goosing the broad stock indexes higher. The S&P 500 now staggers sideways like a drunk on Saturday night in Times Square. The chart indicators are non-committal in either direction.

The SPX spank down from the maroon lines and upper band violation tags the middle band, then the lower band and that is when the dollar weakness kicks in causing price to move back to the  middle band at 2474. The sideways blue channel is in play and price threatens to break out higher from the top trend line at 2475-ish. Looking at the SPX S/R information from the weekend, the 2475 is resistance. If that is taken out, the 2478 R is next and then 2484 R these two numbers representing the all-time closing high and all-time intraday high, respectively. So this current dance at SPX 2475 is an important level.

Price came down to fill the gap at 2460-2465 previously discussed but then jumped higher on the weaker dollar. The S&P 500 can still be considered to be on an island above 2465. Bulls win big above 2475 since price will likely run higher to test the all-time highs. Bears need a failure through the 2460-2465 gap before they can cheer.

Volatility remains subdued punching the bears in the face day after day. The VIX is at 10.16. Watch to see if price breaks out above 2475, or not. Other than that, the stock market is very dependent on the US dollar index. A recovery in the dollar will likely cause stocks to retreat. Further dollar weakness should send stocks to new record highs.

The low ADX indicates that the move higher in the SPX in July was not a strong trend. Considering that the index is near or at record highs, the ADX should be well above 30 indicating that the upside trend is strong. Instead it languishes down at 19. The most important factor in markets is likely the comments and words that come out of ECB President Draghi's mouth this month since he will move the euro and the US dollar index moves inversely to the euro. Watch that blue channel on this very short term (VST) basis. The SPX is printing at 2476. The bulls and bears are battling at this 2475-2476 level. The bears must make a stand, otherwise, a test of new record highs is on tap.

The Dow Jones Industrials, INDU or DJI, print at 21990.96 thus far today, a new all-time record high, within 10 points of the coveted 22K level. Obviously, if the SPX breaks out above 2475, the Dow 22K is a done deal. If the bears hold the line at 2475 and send price lower, the Dow 22K number will likely remain elusive. 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 at 2:21 PM EST: The battle continues at 2475-2476 since lunch time. Price is still deciding which way to go. There is an ascending triangle on the minute charts so if the SPX moves above 2476.76, price will likely immediately jump to 2479 in a flash. Bears need to push price under 2475 as soon as possible. The SPX is at 2476.56. The beat goes on.