Downside Potential Here

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SPX is at a potentially significant inflection point here, with a setup for a possible sharp retracement. SPX has broken down from a short term rising wedge and formed a possible double top. A possible hourly RSI 14 sell signal is brewing and the obvious first downside target on SPX in the event of a significant reversal here would be channel support in the 2740 area. We are looking for a sharp retracement soon and it could well start here.

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If we see this retracement, which could last a couple of weeks and might go as low as a test of monthly pivot at 2681, then we’d be looking for a retest of the all time high on the next move up. SPX 60min chart:

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