Slope of Hope Blog Posts
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The title lets you know where this article is going. For such a routine correction in the US stock market, the Psych/Sentiment backdrop has gotten way out of whack. Do some analysis on Rydex Bull/Bear fund allocations among investors and you will find a historic knee jerk reaction into bear funds over bull funds (by those who still use Rydex funds).
Go do a Google Trends search on ‘stock market crash’ or ‘bear market’ and you get the following results, showing a big rise in interest among the public.
SPX is still in the inflection point I was looking at yesterday morning and closed yesterday at declining resistance from 2096 and slightly over the 50 hour MA at 1945. SPX has broken well above both at the open. The setup for today should be as follows.
On a fill of the opening gap at 1948.86 and sustained trade below there I’d be looking for new lows, which should confirm on a break below Tuesday’s low at 1903.07
On a break above the ES monthly pivot at 1969 (resistance at globex high), approximately at 1971/2 SPX, and conversion of that level to support I’d be looking for a move to the 2030-40 area, confirming on a break over the current rally high at 1993.48. SPX 60min chart: