Battle of the Bands

Just a short post today as I have to drive my daughter to an exam and will miss the first half of what promises to be a very interesting session.

I was a bit cagey on twitter last night about whether the low was in, as the bounce was looking a lot like a bear flag, and I said as long as bulls could hold 1971.5 SPX tomorrow morning we should be on the way back up. ES broke down hard overnight and clearly that isn't going to happen. This is good news. SPX has been butting up against the weekly upper band and needs some headroom for the next move up.

The key thing to watch today is the SPX daily middle band at 1959. If that breaks with any conviction today then my target would usually be the daily lower band or any major daily MA (50, 100, 200) higher than the lower band. As they are all currently below the lower band that would leave the daily lower band in the 1930 area as the target, and very possibly then a test of the 1926 low. The overall uptrend is not in any real trouble unless we see a break below rising wedge support from 1737, and that's now in the 1910 area. SPX daily chart:

You can see on the ES 60min chart that the retracement was a decent 61.8% fib retrace and I'm working a possible falling channel. If that holds then I'd be looking for the low today in the 1945-7 ES area, so low 1950s on SPX. You can see that the 60min RSI is extremely oversold. I'd be surprised to see much lower than that today. ES 60min chart:

I'll be back in for the second half of the session.