Wednesday, October 4, 2023

SPX S&P 500 Daily Chart; Fibonacci Retracements; Cyclical Bull/Bear Line in the Sand at SPX 4200-4210


The US stock market is making a big decision these days either to fall into a crash scenario, or, stage a relief rally and keep the wolf at the door a bit longer. The SPX drops to a LOD at 4216 yesterday and ends the session at 4229.

The critical SPX 12-month MA at 4207 decides if stocks remain in a cyclical bull market going forward, or, if stocks decide to enter a cyclical bear market and begin falling apart. The NYA 40-wk MA cross is already in failure signaling a cyclical bear market ahead for stocks but the SPX 12-mth MA cross needs to confirm the developing negativity.

The 200-week MA at 4202 is a line in the sand.

The Fibonacci retracements for the big rally from the October bottom to the July/August top are shown with the blue lines. The 38% Fib retracement is at 4206. Are you noticing a theme?

Yes, a confluence of support for all the market marbles is formed at 4202-4207 just call it 4200-4210. It is the cyclical bull/bear line in the sand. If SPX loses 4200-4210, all hope is lost, and any of you long the stock market would get fleeced.

Since 4200-4210 is such critical support going forward, it would not be surprising for price to bounce for a few days as the bulls try to save the day. S&P futures are up +15 about 45 minutes before the opening bell for the US regular trading session on this hump day.

If you are long the stock market, get down on your knees, and begin to pray, that 4200 is not breached. Bad things will happen below 4200 (crash).

If the 38% Fib fails, the 50% Fib at 4085 would be on tap next. This 4085 target lines up with the SPX H&S pattern downside target.

The 2-10 spread (US yield curve) is the least inverted in 1 year! Recession is knocking at the door. 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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