Last week I was looking at support that needed to be broken at the SPX daily middle band to open further downside and obviously SPX did that and could be at or close to the wave A low here, looking then for a B wave rally, and then a C wave down into the next low window and to complete the current move. On Sunday’s free public Chart Chat I was talking about a possible H&S target in the 2840 area which was reached at the lows this morning. If you missed Sunday’s Chart Chat or would like to see that again, that is posted on our May Free Webinars page.
We hold a subscriber only webinar every month at which we answer any questions attendees have, and review important markets in response to those questions, and we are holding one tonight at which, this time only, all are welcome. So if you’d like to see that you can register for that on our May Free Webinars page or you can register to attend using this direct link.
So where are we up to on the SPX daily chart? Well the short term H&S target at 2840 has been reached and the daily RSI 5 sell signal has reached target. The low today was just under the 3sd daily lower band, currently at 2839, and SPX has also currently broken below the 50dma now at 2859. If the B wave has now started then the rally should respect either 2900 or the monthly pivot at 2914. A break and conversion of the monthly pivot at 2914 to support at this stage might well finish this move early and deliver another all time high retest. After the Wave B rally we would ideally see a high latest Monday, down into the next cycle low to be made middle to end of next week.
As I was saying on Chart Chat, my ideal target for that low would be at the 38.2% retracement and retest of the March low at 2722, but I also mentioned possible support in the 2800-20 area, and a possible alternate H&S neckline in the 2785 area.
SPX daily chart:
In the short term the current low is now on any hourly or daily positive divergence so while the Wave A low may be in, it is unlikely that the main retracement low is in. Any rally here should just be a rally before lower lows in the near future. We shall see.
SPX 60min chart:
Everyone is welcome at tonight’s webinar an hour after the close. Hopefully I’ll see you there.