• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 695 days Americans Still Quitting Jobs At Record Pace
  • 697 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 700 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 703 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 711 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 715 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

SPX: Follow Up of the Short Term EWP

It is not the Ending Diagonal that I was looking for, as I posted last Tuesday:

SPX 60-Minute Ending Diagonal Chart
Larger Image

But maybe price is still forming a different bearish rising wedge:

SPX 60-Minute Ending Diagonal Chart 2
Larger Image

In order to increase the odds that this Ending Diagonal will pan out price, despite yesterday's consolidative session, which usually means a continuation pattern has to surprise the majority with a corrective pullback.

This "unexpected" short-term pullback can pan out if a Double Top is confirmed today. This pattern has a theoretical target at 1509 (More or less where the 10 dma is located).

Below is the SPX 5 min chart I posted yesterday at the eod on Twitter/Stocktwits:

SPX 5-Minute Chart
Larger Image

If the wedge discussed above is confirmed then I maintain the scenario that calls for a multi-week pullback wave (IV) of the large Ending Diagonal scenario discussed lately.

The potential target should be located in the range: 1458 (50dma) - 1434.

SPX Daily Chart
Larger Image

In the Technical front there is no change: the warnings that this up leg is long in the tooth remain omnipresent across the board of both short-term and long-term breadth & momentum indicators

Below I show a few examples:

  • McClellan Oscillator: Huge negative divergence both vs its January peak and vs Friday's hod and below the zero line.

NYSE McClellan Oscillator Chart

  • RSI is also showing a huge negative divergence both vs its January peak and vs last Friday's hod.
  • The MACD remains with a bearish cross.

SPX Momentum Chart
Larger Image

  • NYSE Adv-Dec Volume also with negative divergence vs Friday's print and in addition yesterday it was negative.

NYSE Advance/Decline Volume Chart

  • The weekly stochastic of the Summation Index is issuing a sell signal, which will have to be maintained by Friday's eod print.

NYSE Summation Index Weekly Chart

So if the wedge discussed above is correct, there should be marginal upside but the downside risk could be worth 60-80 points, hence R/R in my opinion is clearly leaning against the bulls.

I am watching KBE (In addition to an already long position in SPXU) as a possible candidate for a short setup (Long FAZ).

Here we have another potential wedge.

If/when price breaches 26 I might go long FAZ.

KBE Daily Chart
Larger Image

Lastly, but I don't have time now to post any chart, both the EUR and the European indices have already began a correction, which should be far from over. In my opinion odds are larger for SPX playing catch up to the down side.

 

Back to homepage

Leave a comment

Leave a comment