SPX S&P 500 Daily Chart; Fibonacci Retracements; Oversold; Lower Band Violation

The plunge in the S&P 500 was quite a sight the worst week since the financial crisis and December likely the worst month since the 1930's and Great Depression. Price stabs through the lower standard deviation bands so the middle band at 2635, and dropping, is on the table.

The blue lines show the proposed Fibonacci retracements to the upside if this current low remains in place. The drop is from the record top at 2941 down to 2408 a huge 533-point crash, -18.1%, on the verge of a bear market. Other major indexes such as COMPQ, NDX, RUT, WTIC oil, XLF (banks), TRAN and SOX are already in a bear market. None of the so-called brilliant analysts forecasted the drop. Keystone did. Corrupt Wall Street deals in insider trading and other nefarious practices that makes them all richer; a bunch of crooks.

Note the large volume last Friday. If a relief rally occurs, price would eventually want to come back down to test the price at this high volume level. For a relief rally that is expected, the first level, Fibonacci-wise, that price would be expected to seek is the 38% Fib retracement at 2611. The 38%, 50% and 62% levels are the key Fibonacci retracement levels for any big price move in either direction. The middle band target is moving lower to join the 38% Fib and create a confluence at the 2580-2635 area along with price support from late October, mid-November and early December. Price should bounce from the oversold RSI, stochastics and money flow.

The green lines show positive divergence in place but the near-term downside momo creates some weak and bleak activity. The SPX hourly and daily charts were poised for a rally until Fed Chairman Powell stabbed equities last Wednesday afternoon. Markets could have survived that but President Trump harpoons the market with a government shutdown. Trump took over 100 points off the S&P 500 to finish the week not a good outcome for a guy obsessed about using the stock market as a gauge of his presidency. The Russell 2000 small caps are down to levels printed in November 2016 when Trump was elected.

The MACD line made a lower low over the 6-week period which is negative. Price may want to chop sideways for a day or three, but should set up again for a bounce. The President Trump and democrat shutdown drama is being priced-in to the charts.

The Santa Claus Rally is the period from the day after Christmas through the first two trading days of the year so 12/26/18 through 1/3/19. There is a strong likelihood for a rally considering the uber low NYMO and uber high put/call ratios. The upside target, if the rally gets legs, is the 2580-2635 area. With volatility high, the VIX is at 30-ish and higher, the wild and erratic upside and downside market swings will continue both intraday and day to day. 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.