The bounce scenario that I posted on twitter on Monday night played out and then some, and the SPX highs yesterday started to break significant levels that I would prefer to see unbroken, with a break over declining resistance from the last high, and small breaks over both the daily mid band and the 5 DMA. This is a very important inflection point and bears must deliver a red day today to avoid confirming those small bullish breaks today. Bulls want to confirm yesterday's breaks and also break through the remaining important resistance levels in this area which are as follows:
- 2095.00 - 100 day MA
- 2098.37 - 50% fib retrace from 2132.82 high
- 2098.45 - weekly middle band
- 2100.60 - 50 day MA
- 2102.71 - 50 hour MA (dropping fast)
On a close below 2090 (ideally under 2085) today yesterday's small bull breaks are negated. On an hourly close over 2103 (over 50 hour MA) there is a likely serious bull break, and on a close over 2103 (clear close over 50 day MA), there is a confirmed serious bull break. I'm leaning short until we see those bull breaks, and watching the 69% bearish rising wedge from the current retracement lows. SPX 5min chart:
From a trendline perspective I have my eye on a possible falling channel with currently theoretical channel resistance just under the 50 hour MA. A reversal there would be bearish, a break above not so much. SPX 60min chart:
Bulls and bears are both on must perform at an inflection point test that is more serious than I was expecting. The Fed meeting today could obviously be a big market mover. Stan's bull/bear line today is a bit higher than mine at 2102.5 ES, effectively over the 61.8% fib retrace of the move from 2132.82, with an SPX equivalent number at about 2107.5. I would already be leaning bullish by then. You can see Stan's Wednesday morning premarket video at theartofchart.net
here, and if you want to see those on Mondays, Wednesdays and Fridays you should follow the blog to get an email as soon as they are published.
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