I don’t have any positive divergence here on the 60min or daily RSIs, apart from a slight divergence on the 60min RSI 5, but I have a lot on the 15min and 5min charts. I’m not looking for the main retracement low here, but SPX is very oversold short term and I’d expect to see a decent bounce shortly. That bounce may already have started. SPX 60min chart:
The obvious targets for a strong bounce would be the 200dma at 2064 and the daily middle band just above at 2071. If the rally gets that far I’d be looking for failure there as this retracement does not look finished. SPX daily chart:
Opex is on Friday and in the wake of the Paris attacks we may have a headline minefield week, so it could get very choppy. Short term a bounce looks much more likely than continuation down.
