Sunday, October 21, 2018

SPX S&P 500 Daily Chart

The collapses from rising wedges can be quite dramatic and the SPX daily chart verifies that expectation. The red lines show the negative divergence and overbot RSI and stochastics that lead to the top and failure. It was a bloodbath.

Interestingly, that low intraday print at 2710 occurs without any of the indicators positively diverging. So price bounced solely from the oversold RSI and stochastics. Without possie d, the expectation would be for price to roll back over and come down for a test of that 2710-ish level to see if positive divergence will form, or not.

Stocks are moving on emotion these days. Price violated the lower standard deviation band so the middle band at 2854 and dropping is in play. Price will bounce or die from the 200-day MA at 2768 tomorrow, or more importantly, from the 2764-2776 support gauntlet. Bears win sub 2764. Bulls win above 2776.

The path downward is exhibiting an expanding triangle pattern or megaphone pattern. If price follows this pattern, the SPX would drop like a rock to the 2625-2680 area. 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.

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