Category Archives: Fibonacci

Unfinished Business

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The SPX daily RSI 5 closed at 32.79 yesterday, and the retracement is now larger than two of the past 29 signals since the start of 2007. SPX has reached a level where a low wouldn’t be an extreme statistical outlier. This isn’t a false signal that is part of a larger sell signal forming however, so once I strip out the four of those, then 20 of the remaining 25 signals made it to the target level at 30 on the RSI 5. This retracement may well make it there as well.

There is something else to consider as well. SPX has broken below the daily middle band, and confirmed that break by holding below it yesterday. When this happens then there will be a test, most of the time, of either the daily lower band, or a significant moving average. My eye is drawn to the daily lower band at 1976.62, and the 50 DMA at 1972.56. Both of these are decent targets for any further move down. SPX daily chart: (more…)

Possible High Forming

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Last Thursday I was outlining the two main options for the current move as I see them. The first option is failure at 2010-20 resistance to make the second high of a double top targeting the 1800 area. The second option is that SPX breaks over that resistance and heads to currently theoretical channel resistance (from 1343 low), somewhere in the 2060-90 area. I said then that I favored the first option, but obviously we might see a break up into the second.

So where are we now? Well we haven’t reached my resistance area yet, but we have a clear 70% bearish rising wedge established from the 1904 low, and increasing negative divergence on the 60min RSI 14, the daily RSI 5 and, always nice to see, the daily NYMO. We have a promising looking top setting up for that 2010-20 test, and the odds of a failure there are improving. SPX daily chart:

140825-C SPX Daily Trendlines BBs MAs

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