This is the scenario we are currently looking at (EXPLAINED BELOW):
As you know, we recently had the WORST Dow Jones single-day drop in history. (That's the last I'll speak of the DOW, now lets analyze a true index). The S&P has shown us signs that maybe it's ready to correct too. We see the weakly chart giving us a STRONG bearish engulfing candle at a top with extreme agreement across many indicators. We then see it make an attempt (arguably) at lower lows on the daily chart, confirmed by downward momentum.
SO WHAT'S NEXT?
Well of course we don't know- but here's my outlook based on the technical analysis. We will see a pullback SOON. This pull back will take us up in to the area I have labeled POSSIBLE RANGE. From here- the market will decide what it wants. If it wants to remain bullish we may see it get stuck in a range for some time, before breaking the ranging ceiling and achieving new highs. IF it decides to go bearish, the pullback will result in a selloff and we will fall down to the levels listed on the chart.
HAPPY TRADING. QUESTIONS WELCOMED BELOW.
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We are holding at the bottom of the range. Will be interesting if we head back up to 2873 to break the range and FALL
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UPDATE TO POSSIBLE LOW: 2246, NOT 2195
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As we can see... this last support level is HUGE. Interesting to see what the SPX will do from here.
All the trend lines broke. The 200 ma broke. But, the market appears to be using Fib retracement to identify bounce points instead of the trend lines. And from what I could tell, the fib retrace lines on the Nasdaq chart seem to be the cleanest, which seems to indicate that Nasdaq is what people are looking at for over-all market direction. The last trading session saw a bounce off of the .5 retrace level. Lots of people think the bottom is in but if the low from last Friday's session (~6631) can't hold, I think we will definitely see the lows on your chart.