I was saying in my premarket video on Monday morning that ideally what we would see this week is a rally on Mon/Tues, and then another leg down on Wednesday through Monday next week in line with the very bearish historical stats for these four days. So far that has delivered well, with FOMC on Wednesday delivering the next leg down I was looking for. If you’d like to hear that premarket video every morning that is included in our Daily Update Service and you can get a 30 day free trial here.
On Friday last week I was looking for a test of the daily lower band on SPX. That was hit on Wednesday and yesterday, so there is a possible daily lower band ride starting. The downtrend is strong and at the moment there is no meaningful positive divergence on the US indices that I follow. The 2022 low is at 3636.87, and that is likely to be testing within days.
SPX BBs chart:
SPX hit yesterday the possible target trendline I drew after the rally high at 4119 and that held for a couple of hours before breaking slightly. Overnight that is looking likely to break hard this morning and there is no positive divergence on the hourly or 15min charts, so once SPX breaks and converts 3700 the retest of the 2022 low at 3636.87 is the next big level.
SPX 60min chart:
On NDX the target trendline I drew is now in the 11175 area. That may well be hit this morning too and is possible support. If broken, or hit next week, the retest of the 2022 low is at 11037.20.
NDX 15min chart:
On IWM the target trendline I drew is now in the 169.50 area. That may well be hit this morning too and is possible support. If broken, or hit next week, the retest of the 2022 low is at 162.78.
IWM 15min chart:
On Dow the target trendline I drew is now in the 29650 area. That may well be hit this morning too and is possible support. If broken, or hit next week, the retest of the 2022 low is in that area. Dow would likely be the first index to reach that.
INDU 15min chart:
This has been a strong trend down, and if 3700 SPX can be broken and converted to resistance, I’d expect to see a new low on SPX for 2022 today or Monday. The daily lower band closed yesterday at 3753 with the 3sd lower band closing at 3650.74 so as both should be lower at the open, the 2022 low retest is in range today without a break of the daily 3sd lower band. If we hit the 3sd lower band today or Monday that would be a good indicator for a possible strong rally.
Today is Friday, and those usually aren’t that exciting, so we may see a rally attempt today. If not, then we may well see a new low for 2022 today, with a decent chance of at least a decent rally after that low retest. If we don’t see that today then we likely see that on Monday.
We did a trading commodities webinar yesterday and gave the usual three trade setups and designs. If you missed that you can see that here or on our September Free Webinars page. We are doing our monthly free public webinar at theartofchart.net on the Big Five and Key Sectors after the close next Thursday and if you’d like to see that you can register for that here or on the free webinars page.
My next post should be on Monday before the open. Everyone have a great weekend. 🙂
23rd Sep 2022