SPX S&P 500 Daily Chart; Lower Band Violation; Price Testing 150-Day MA Support

The uber high CPC and CPCE put/call ratios and uber low NYMO indicate that a near-term bounce is near for the stock market. The SPX 2-hour chart is set up with positive divergence and wants to bounce now. The daily chart above is set up with possie d as well after the three intraday tests of the 2822-ish level. The MACD line is weak and bleak over the last few days, which could lead to a jog move (down-up-back down for the bottom), however, it is possie d over the last 2-1/2 months favoring the bounce.

The money flow is threatening to print a lower low than a couple weeks ago. If that happens the daily chart will likely need to jog for a couple days or so to place the bottom. Watch to see if the Aroon green line crosses above the red line signaling the all-clear for upside.

The ADX is up to 31 (purple box) indicating that the move down is a strong trend. Thus, if stocks bottom over the next day or few, and then rally for several days perhaps up to 2950-ish, chances are they may roll over again. The brown box shows that the trend higher in April was a strong trend but that petered out in early May and down she went. The blue box shows the up move for stocks in July that could not achieve strong trend status and equities collapse as August begins. The ADX moves higher liking the down move in stocks.

Price was squeezed by the tight standard deviation bands (yellow arrows and bands). Tight bands squeeze out huge moves but do not predict direction. The August move rewards the bears this time with a sharp collapse. Price takes out the lower band with a vengeance and then bounces up towards the middle band. The negative US-China trade war rhetoric sends stocks lower again and they tap on the lower band again. The middle band, which is also the 20-day MA, is in play at 2944.

So the indications point to a near-term recovery rally that begins either tomorrow (Friday) or early or mid next week. It is likely sooner rather than later so the bottom will likely occur Friday, Monday or Tuesday.

The moving averages are key possibilities for support and where the stock market bounce will occur. The SPX (stock market) is at 2848 and may bounce from the 150-day MA support at 2850, or venture lower to test the SPX 10-month and 12-month MA's at 2806, or 50-week MA at 2804, or 200-day MA at 2797.

Of course, any tweet from President Trump, or comment from the Beijing communist leadership or central banker statement will impact market direction. Note the 2797-2806 support gauntlet level which is for all the marbles; if 2797-2806 fails, stocks could very likely immediately collapse into a major market crash. Keystone will be dipping his fat toe into the markets on the long side over the coming days. 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.