Mind The Gap

SPX falling channel support held again yesterday and that has delivered a strong bounce from the trendline that would normally follow. We are now at an interesting stage where at the close last there were fixed buy signals on both of the SPX 60min RSI 14 and 5, and also on the 15min RSI 14 and 5.

So have we made the low for the current move down? Most likely not, or at least it would be a funny looking low. Stan and I are thinking sideways consolidation before the low is made and I'm looking for much or all of this impressive gap up on SPX to be given back by the end of the day. Channel resistance on SPX is in the 1925 area and I have that falling at about 12-4 handles per day. I think that is more likely to be hit tomorrow than today, though I could be mistaken.

Most of the indices are showing decent patterns from the FOMC high, with the exception of TRAN which is showing a perfect broken and retested declining resistance trendline: Scan 3x 15min SPX INDU TRAN charts:

Scan 3x 15min NDX RUT NYA charts:

Bulls do have a shot at breaking this up today, but they'd have a better shot tomorrow. The last day in September has been negative six of the last seven years, and the last day of the month has been down nine of the last ten months. If bulls fail here then this big opening gap has a very good chance of being filled by the close.