That was a very pleasant change of pace on SPX yesterday, with almost a test of the high, and then a decline to test the daily middle band, and since then a recovery in the afternoon and overnight back to test yesterday’s high. Short term this puts SPX at a fork in the road.
On the SPX 60min chart there is a possible double bottom targeting the 1995 area if the current 1985 high can be broken with confidence. There is also a possible double top setting up with a target in the 1945 area on a break below yesterday’s low.
The historical stat I have been watching since last Friday suggests a test of the highs here and then a fast decline to test the daily lower band, currently also at 1945. The daily lower band is rising fast however and may well be over the last low at 1952 by the time it would be tested. That fits the stat too, as only one of the three previous instances made a lower low at the lower band touch. SPX 60min chart: (more…)