SPX put in a sixth day riding the daily lower band yesterday, with a touch of the lower band at the low and a hit of falling megaphone resistance at the high. SPX daily chart:
At the high we saw the test I was expecting of falling megaphone resistance, and that overthrew slightly at the high to test the 50 hour MA. After that the day was mostly downhill. So what does this mean? (more…)
Another whiplash day on Friday with a strong rally to 1986. That looked more bullish than it should have done because, rather than rally in the morning and close weak, the rally was in the afternoon and closed strong. Nonetheless the high was in the 1980-9 target range I gave in the morning, and anyone buying that high on Friday afternoon is very heavily down so far this morning. SPX daily chart:
As I remarked this morning, I decided to get cute and not only be short a bazillion equities but also be long the Euro (FXE), miners (GDX), and silver (SLV). All them of them were losers, and I drop-kicked them right at the opening bell. Look for the EUR/USD to perhaps find some support at the red horizontal I’ve drawn (1.2744), but I wouldn’t bank on it.
SPX broke down hard yesterday and closed near the lows, giving bears their first complete day in a while. SPX broke back below the daily middle band and, as long as we don’t see a daily close back above it, the next obvious targets are the daily lower band at 1985 and the 50 DMA at 1976. The band pinch here means that it is very likely that SPX will start an extended band ride in the near future. The bulls had a shot at starting an upper band ride last week and couldn’t sustain it. If bears can get SPX to the lower band then they get a shot at starting a lower band ride instead. SPX daily chart: