4 Jun 2015 - One Option Eliminated

With the move today in the SPX, the option of a triangulating pattern for a corrective set up has been eliminated.  With that said, we could still look at a corrective pattern that could end sooner than later.  The daily indicators is now approaching an OS condition and the last few times this has happened it had a impulsive or dramatic rally.  Now this might not happen this way if indicators stay in OS for a longer period of course.  This is why we study these conditions.

To see these conditions when indicators went into OS condition, we can look at the bottoms of Oct 2014, Dec 2014, Mar. 2015.  These bottoms were met with a quick turnaround.  So if you are long, you should be looking for a quick turnaround to confirm your suspicion.  If you are short, then it would benefit you to have a signal that stays in OS for a prolonged period (ie. OB condition in late Oct  to late Nov. 2014) where you see an accelerative or a distancing of price.  These conditions allow for larger, low risk profits.

The current close in the SPX today is resting on the 75 day MA.  Breaking this would have us look for support at the Lower BB line of 2089 or 2090 SPX.

MT: DOWN
ST: DOWN
PA: DOWN

Daily:

 

Note:  Acceleration risk is still to the downside, so it is wise to look for an early indication of trend reversal or pause if indicators on the intra-day moves out of OS or Pos. Divergence.