$SPX

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$SPX has clearly defined risk levels. Its facing a good test at its 161.8% fib extension from the 2016 lows. The rising bearish wedge should lead to a pullback which will find support at the 100% fib extension. I would use this as a buying opportunity.

Same same but different?

Are giant robots/algos controlling the markets? The last 2 big -8% dips lasted almost exactly the same time periods of about 2 months, so will this time be different? Applying the same time ruler on the last 2 dips to an expected upcoming dip, we get 06 May 2013 as the week the market bottoms around 1420, which equates to about -8%. The weekly RSI is also overbought, same time as when the last 2 corrections began, & theres that long term rising RSI support from Sept 2011 still in play to support the idea of a 1420 support.

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NDX & SPX

As mentioned previously, NDX has hit its HNS right shoulder target at 2783 & reversed down. Now looking for support below its 200DMA around 2650. If that doesn’t hold then lower support is 2550 on the rising multi year trendline.

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SPX is showing a bearish shooting star on its monthly chart. First support is 1466, followed by  1415. Technically it looks setup to hit around 1415 before a much stronger reversal. Monthly chart isn’t overbought, so short term declines are expected.

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Having said all that, short term $TRIN & $NYMO are showing oversold signs, so be prepared for strong daily reversals along the way down.

SPX

It seems the 100WMA is more important than the 50 or 200WMA for the SPX. Since 2010, the 100WMA has been a strong support line, therefore I would imagine the next decline to be no different. 1400 is line in the sand which also is 23.6% fib retracement of 2000 high (secular bear theory). Strong break/reversal from there is telling. RSI support trendline is also quite clear.

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SPX – what if

What if the US went “over the cliff”? Put it this way, neither side wants to be seen agreeing outright & giving in. Geithner has his bungee cord ready.

So let the charts do the talking: the SNP500 could be forming a mid term HNS, and right shoulder complete target is about 1300, which happens to be at about the converging 200WMA.  This is would be a very negative result as it would be breaking the long term rising support formed since 2009. Many individual stocks are still setting up for more upside as seen with 63% of SNP500 stocks above their 50DMA, & peak is >80%, but their rallies could be derailed by what happens this year end.

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