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SPX has seen a decent retracement from the highs, the reversion to the mean target at the 45dma has been hit, and a lot of decent looking bull flags have been forming on US indices. SPX may now be close to a retracement low, and a daily RSI 5 buy signal fixed a couple of days ago. The overall setup here is strongly suggesting that the next move on SPX may be a retest of the 2023 high at 4607.07.
SPX daily chart:
Pretty much everything I have written about in my last few posts on SPX delivered. The bull flag wedge from the high broke up. The IHS that then formed broke up and made target, and the bull flag made the target with a retest of the June high.
So what now? Well I was saying that I was expecting a retest of the high to form a topping pattern setting up a larger move down in a reversion to the mean move. The level I use as the mean is the 45dma and that is now at 4287. The last two such moves broke down through it and, if so, I would be wondering about a possible target at the main rising support trendline from last year’s low, currently in the 4090 area.
(more…)I was looking earlier this week on the very high quality falling wedge that had formed on SPX from the last high and considering the odds that it was a bull flag setting up a retest of the high.
Since then the wedge has broken up, retraced about 50% of the decline, and an IHS has formed with a target back at a retest of the last high.
At this stage there are only two main options. Firstly that the IHS breaks up, converts the neckline to support, and goes on to retest the last high, and secondly that SPX drops back through 4360, and likely then retests the last low at 4328.09, and then very possibly down further. It is very likely that we will see one of those two options happen next.
(more…)Over the last few days SPX has been retracing and is approaching the first big support level. That is the daily middle band, which closed yesterday at 4312, with the low yesterday at 4328. That is a target that may be reached today.
SPX daily BBs chart:
The high last Friday was only three handles below the close on the daily 3sd upper band, which is a rare event, so I did what I like to do with rare events, I looked back and crunched some numbers looking at previous examples. These are the stats I posted on Monday morning.
There are eighteen previous instances since the start of 2007 where a move has either punched through the 3sd upper band or delivered a near miss within 0.0025% of it (10 points at nominal SPX level 4000). Excluding the punches, none of which were preceded by near misses, there are twelve instances. Of those twelve instances five of them delivered a second near miss within three trading days, usually on the next trading day. Of those two delivered a third near miss within four trading days.
(more…)
