SPX S&P 500 2-Hour Chart

Remember for a couple weeks the SPX 2-hour chart was highlighted to identify the top. Price kept sneaking out new highs with the long and strong MACD line but all the indicators negatively diverged at that top candlestick so the the fix was in. The neggie d needed to spank price lower and that is what it did. Price violated the lower band so the middle band at 2806 and falling is on the table.

The RSI and stochastics are oversold in this 2-hour time frame and agreeable to a bounce in price. The RSI is possie d, also the stoch's and money flow so that can create a one or two candlestick bounce but note the MACD line and histogram making lower lows. These indicators want to see price come back down again after it bounces for a candle or two. When price then comes back down and makes lower lows say 2 to 4 candlesticks ahead, the bottom is in if the MACD turns possie d so that is what you have to watch for. It is the mirror image of waiting for the top to form with neggie d.

Stocks are falling like a rock as this is typed. Wow. The S&P 500 is down 38 big points, -1.4%, to 2724. Wow. Bingo. The SPX is now down 149 points from the record top at 2873 a -5.2% drop. After 402 days, the SPX finally makes a -5% correction. This was the longest streak in the history of the market.

Watch for the positive divergence to show up with the MACD line; that will be the bottom. For now and probably 2 to 4 candlesticks, which is 4 to 8 hours trading time, price will chop sideways (it is in freefall as this is typed) looking for the bottom. 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 12:16 PM EST on Tuesday, 2/6/18: There was more downside on tap as per the above chart but who knew an epic and historic flash crash would occur? The short-VIX instruments are blowing up and going insolvent. Keystone has warned all followers to never play a VIX ETF or ETN; you will lose your money; cross them totally off any watch list; now you see why since anyone long XIV or SVXY, and others, lost all their money in a heartbeat. On the SPX 2-hour chart at munchtime on Tuesday, the indicators are all possie d except for the MACD line. So you know the drill. There is probably a jog move needed, up, then back down again to a matching price low, to allow the MACD line to go possie d, that will be the bottom, say a couple candlesticks out, say 2 to 4 hours, so that would be this afternoon or tomorrow morning. The SPX daily chart indicators, however, remain weak and bleak. So the stock market will likely bounce starting this afternoon or tomorrow morning due to the 2-hour then up for a few hours say tomorrow and Thursday, then likely roll over to the downside again to print more lows for the stock market going forward.