SPX has broken sideways out of its channel. If it now chops around up here and fails to move on to new highs (by more than a couple of points), we’ll have a nice set-up for a short position, just like the action in January:
Prophet.net
Even if stocks oblige with a nice drop, we can’t be sure that it will be the start of something big unless we see strong downside volume and impulsive waves.
UPDATE:
Very nice impulsive decline. Don’t count on it holding though — we might just ramp late this afternoon or early tomorrow if January is any indication. But this is looking good so far – if we do test the highs, it will be a sweet entry for a short with a tight stop (as is, I’m pretty short already, but would get more so at 1110).
-
There is decent support at this morning’s low at 1095, but if we break it we could head right to 1080-1085, where there is better support. I suspect that break of 1095 would call into question the January analogue and suggest something more immediately bearish. Counting the waves on the 2-min chart, we could use a 5th wave and new low here.
Looks to me that we are at a critical technical level here.
Today and tomorrow will seal the fate: rise to 1200 or finally the fall?
http://2.bp.blogspot.com/_sL6ril9lDkw/S4QBbL-frBI/AAAAAAAACIY/rnDDQl18CXM/s1600-h/100223+1120+am.jpg