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SPX Breaks Rising Channel Support (by Springheel Jack)

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I won't include the SPX daily chart today as I posted the SPY equivalent yesterday in my weekend post at MarketShadows and you can see that here. What I have to add to that this morning is that I have had a close look at the current bollinger band setup back to the start of 2009, and have come up with the following stats:

  1. 9 instances – Touch and reversal or 2 day base at the lower bollinger band.
  2. 7 instances – A plunge through the lower bollinger band.
  3. 10 instances – Riding the lower bollinger band downwards as we are seeing at the moment. 
Of this last group of 10, which is the group of interest today, and we would now be starting day 4 as the first touch was on Wednesday, the outcomes were as follows:
  1. 2 instances – A low on the third day – short term bullish
  2. 6 instances – A low on the sixth or seventh day 20 to 70 points lower – short term bearish
  3. 2 instances – A low on the tenth day or later over 50 points lower – short term bearish