SPX S&P 500 Daily Chart; Potential H&S

The SPX daily chart is a pile of spaghetti. The red rising wedge, overbot conditions and neggie d were previously described identifying the top at the end of July and early August, which occurs. The blue dots show where price was extended a maximum amount above the moving averages that are all in an extended ribbon with the 20-day MA above the 50-day MA above the 100-day above the 150 above the 200. Price needs a mean reversion lower when it is extended and the move lower occurs off the all-time record top at 2491 on 8/8/17.

The action has been choppy but the pink dots show the pattern of lower lows and lower highs which creates an downward-sloping pink channel. Price is testing the upper trend line to try and escape that channel. This key 2450-2457 area is also where a right shoulder is in place for a potential H&S pattern (brown bars). See the SPX Support/Resistance missive previously posted to study the importance of the 2450-2457 resistance level.

The head and shoulders neckline is at the strong 2416 price support so a head at 2491 would target 2341 if the 2416 fails. Using the closing high at 2481 as the head would target 2351 if the 2416 neckline fails. This 2341-2351 landing zone for the H&S corresponds well to prior price support/resistance from March-May.

The ADX is down to a paltry 11.55. The ADX has trended lower for the last four months as the S&P 500 has rallied higher. The lackluster ADX indicates that the uptrend in the stock market in this daily time frame is NOT a strong uptrend. If the stock market rally was strong the ADX should be above 30 now and moving higher. If the downtrend continues for stocks and the ADX rises going forward it will actually verify that a downtrend in price is a strong trend, but you just have to watch it to see how it plays out.

20-day MA 2457.18
200 EMA on 60-minute chart 2453.03
50-day MA 2450.59

20-week MA 2421.56
100-day MA 2421.09

Price staggers sideways. Market bulls win big if they can punch up through the strong 2450-2457 resistance gauntlet. Market bears win big if they can push below the 2416-2422 support gauntlet. Price moving through 2416-2457 will likely continue the sideways choppy slop. 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.