• 745 days Will The ECB Continue To Hike Rates?
  • 746 days Forbes: Aramco Remains Largest Company In The Middle East
  • 747 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,147 days Could Crypto Overtake Traditional Investment?
  • 1,152 days Americans Still Quitting Jobs At Record Pace
  • 1,154 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,157 days Is The Dollar Too Strong?
  • 1,157 days Big Tech Disappoints Investors on Earnings Calls
  • 1,158 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,160 days China Is Quietly Trying To Distance Itself From Russia
  • 1,160 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,164 days Crypto Investors Won Big In 2021
  • 1,164 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,165 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,167 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,168 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,171 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,172 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,172 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,174 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

SPX New Closing High, What Next?

SPX ends the month of October with a massive Hammer candlestick, which removes the scenario of a deeper correction. Hence higher prices should be expected in an extension of the pattern from the October 2011 lows.

SPX Monthly Chart
Larger Image

Where are located the next resistance zones?

In the weekly chart we can see that above the September peak (2019.26) we have:

  • The upper Bollinger Band which coincides with a trend line resistance from the July 2014 peak at 2036 +/- (If the Ending Diagonal scenario pans out this trend line should no be breached)
  • Long term trend line resistance in force sine May 2013 which by the end of December will stand at 2095 +/-

Regarding the weekly time frame supports we have:

  • Support 1 at 1986
  • Support 2 in the range 1974-1968 (If the up trend has been resumed the 20 w ma should hold)
  • Support 3 at 1951

SPX Weekly Chart
Larger Image

Last week I suggested two potential patterns:

  • Retest of the panic lows with a Flat or a Triangle. Obviously today this pattern is not the frontrunner simply because price will have to breach the 50 d, 20 d and 200 dma

SPX Daily Flat Triangle Chart
Larger Image

  • From the February 7 low price is forming an Ending Diagonal, which will conclude a Triple Zig Zag from the March 2009 lows. If this is the case price should be close to complete the wave (A) of a Zig Zag that will establish the third wave of the Ending Diagonal

SPX Daily Ending Diagonal Chart
Larger Image

SPX last Friday soared with a gap up and go after the Bank of Japan boosted its asset-purchasing program. We have a daily Marubozu, which per se is suggesting more follow-through to the upside but often a small range body, which would indicate buying exhaustion, follows it.

If we are approaching a short-term top the levels to watch to the downside are:

  • Support 1: Range 1994-1985
  • Support 2: 1968-1964 (Flat 50 & 100 dma)
  • Support 3: 1949
  • Support 4: 1935 (Rising 20 dma)
  • Support 5: 1912 (Flat 200 dma)

SPX Daily Chart
Larger Image

In the following 60 min chart we can see that price could be forming a small rising wedge. If the wedge pans out and price breaches the accelerated trend line (Blue TL) then probably a sharp but short-lived pullback should not breach the 200 hourly ma which today stands at 1940.

SPX 60-Minute Chart
Larger Image

The SPX rising wedge should pan out if VIX is forming a falling wedge:

VIX 60-Minute Chart
Larger Image

 

Back to homepage

Leave a comment

Leave a comment