SPX S&P 500 Daily and Weekly Charts; H&S; November Rain Falls On Stocks

The neggie d spankdowns continue in the daily and weekly time frames. On the daily chart, price tagged the upper standard deviation band so a trip back to the middle band, the 20-day MA, at 6763, was on the table, and the lower band at 6559, and both occur. A trip back up to the 20 is on the table for a relief rally.

Price makes the lower low on the daily chart and the RSI, histogram, and stochastics are positively diverged wanting to see a bounce and start of a relief rally. Ditto the oversold stochastics. However, the MACD line and money flow remain weak and bleak wanting a jog move to occur (down-up or up-down-up) to create possie d and the bottom. Positive news may occur that will also begin a relief rally.

Price typically rallies from the 100-day MA at 6548 and that is why price is sitting there over the weekend. It is making a bounce or die decision and dip-buyers anxiously bot stocks seeing that the SPX has dropped to the 100.

The SPX weekly chart remains nasty with indicators weak and bleak wanting to see lower lows and lower highs on a weekly basis ahead. The multi-week pullback should continue into December. That makes sense since the first couple weeks of December is a lot of tax-loss selling that may create a crescendo down below. Price bounced off the 20-wk MA at 6548 (same as the 100-day MA) so that moving average carries clout going forward.

This week markets are closed for Thanksgiving on Thursday and Friday is a half-day closing at 1 PM EST. Traders may be in a good mood for the holiday and with the daily chart trying to establish a bottom, perhaps some recovery in stocks may occur into the holiday weekend. When a month is down, like now, the last few days are usually a recovery rally. However, as mentioned, the weekly chart is bad so the lower prices would then expect to re-exert themselves.

The other outcome is going down the tubes right now, this week, holiday be damned. That would manifest by a failure of the blue H&S pattern on the daily chart. With a head at 69 hundo and necklines at 6600 and 6550, the downside target, if the necklines fail is 6200-6300. Note that the 6600 neckline failed, and then price came up for the back kiss Friday and sits there for the bounce or die decision tomorrow. If price begins falling through 6500 and lower the 6200-6300 is likely on tap.

The orange circles show lots of gaps to fill and price came down last week to fill the gap from early September. That gap from late June at 6050 is big enough to drive the proverbial truck through. The bulls and bears battle wondering if the November Rain will continue through the end of the month. If so, the bulls will be crying, like Slash's guitar. 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.