Just a very quick post this morning as I needed to take my daughter to the orthodontist and only got back a few minutes ago.
A rare day yesterday with a strong decline sustained into the close, rare in itself but very rare on FOMC day. The wind may be changing. The bulls had to break back up over the middle band and totally failed to do that.
This break back below the SPX daily middle band delivers two downside targets. The first is possible range support in the 1990 area, with the daily lower band just below it at 1987. If that fails then the obvious next target is the 50% fib retracement of the move up from 1820,l and that is at 1957. SPX daily chart:
The close tomorrow is important. A weekly close at this level or lower would deliver a conviction break below the weekly middle band, which has acted as closing basis support for five weeks out of the last seven. That would open up targets at the 50 week MA at 1959, close to the 50% fib retracement, and the weekly lower band at 1911, within striking distance of the rising megaphone support trendline that is very much the obvious target for this move. SPX weekly chart:
I posted a very nice looking FTSE short setup on twitter yesterday and some of you might consider carving off a slice of this tasty looking morsel. This is the update on the FTSE chart I posted last Friday arguing that FTSE might well be signalling that the bull case wasn’t going to deliver. FTSE 60min chart:
I’m leaning strongly bearish here. I’m looking for an early rally today that should be sold through a break below yesterday’s lows.
