Yesterday was pretty boring, but yesterday proved what needed to be proven for us. Yesterday, “I expect[ed] a bounce to possible SPX 2605 and maybe even 2622 before the selling continues” and we got 2615 (-9% line) thanks to a late afternoon FAKE REPORT from Bloomberg about the White House not having any active plans to go after AMZN.
Technically, SPX could go a bit higher to 2634, but not only is it not necessary, its extremely unlikely as I sit here @ 3:00AM EST waiting for the EU markets to open and we’re DEAD RED:
If we would have made it back up to 2634, it would provide for a perfect mark for micro-b of minute-c and a standard c=a relationship can then target SPX 2515 to SPX 2450 on a c=1.618x a relationship. Hence, the entire target zone I was mentioning from the weekend into yesterday which is highlighted by the AUG 8 HIGHS on SPX (2491) and SPY (248.91) fits within the SPX 2525-2425 identified region.
There is a BIG WARNING ZONE underneath all of this mess and we can now be clear about the SPX resistance zone: 2625 – 2670.
The HOT PINK “megaphone pattern” is screaming for this to dump and visit the mid/low 2500s and possibly the “textbook CORRECTION RETRACEMENT” to that 2467 (38.2 retracement from FEB 2016 Lows).
A break below SPX 2580 is the first sign of worse things to come (confirmed obviously by a break below 2553)
Chart Color Coding of Major Retracements
- ORANGE ELECTION LOWS
- BLUE BREXIT LOWS
- PINK FEB 2016 LOWS
SPX BIG PICTURE
NOTE: Despite the FEB 9 LOWS and the 2553 Lows last Friday, EVERY SINGLE DAILY CANDLE’S “BODY” has closed above 2580’ish.
SPY BIG PICTURE
So…… the SPX 200d SMA is 2590.76 (the 1st “warning signal”) – 256.60 for SPY
Although we closed back above the 200d SMA yesterday, we ended just below the 2016 Highs line (APR 20 & AUG 18) which has been the “more or less main market support line since the trump Rally commenced.
We’ve got plenty of lines below and a few above, but that 2016 Highs line really needs to be closed above to “hint” that this downtrend might be over with. Really though, we want to see SPX get back above the 2017 Close @ 2674 to give us a bit of a bullish fuzzy feeling.
The TIs are starting to point back up, with the A.I. on a nonideal buy, but this is really begging to find a buy signal to see this. There are a bunch of qualifications far from being checked to indicate an ideal buy signal for such an important and large wave as major-5.
When looked at from a Bollinger bands view and how this is currently set up with the similarities and the decline in 2011 (granted its much faster with us much higher and more room) – this doesn’t look good enough to proudly say a good “bottom is in” setup.
Honestly, without trying to be over-BEARISH and sell some ocean front property in Iowa to a blind trader, this is looking like an ending diagonal triangle is forming with SPX 2525 – 2500 the target within the next few days.
Premiums are pretty jacked up, but I’d be having my sites on SPX 2550/SPY 255 into Friday, APR 6 with today’s APR 4 2585 PUTS the safe bet (as of 3:40AM EST). Really need to see what the charts look like as we get closer to the open, but that’s what I’d be looking at as of now.
We’ve got a pretty big plate of news coming out today and likely more Trump AMZN bashing to boot.
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