As of today’s close, the S&P 500 Index (SPX) is currently in the ‘jaws of the alligator’ — Williams Alligator, to be precise, which is formed by three moving averages, each offset into the future — as shown on the following daily chart.
All three moving averages are curling down and the upper one has just crossed below the middle one…hinting of further weakness ahead. Today’s low touched the lower MA, which roughly converges with the 23.6% Fibonacci retracement level. A break and hold below today’s low of 2964.40, together with the crossing of the middle MA below the lower MA, could send the price down to the next Fibonacci retracement level (40%) at 2835, or even the 50% level at 2712.
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