SPX Sell-Off Rebounds Off Slope Support

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SPX Daily 

Chart Created Using TradingView

Broader Technical Outlook: A break of the objective monthly opening-range shifted the focus lower earlier this week with today’s decline encountering support at the 50% line of the descending pitchfork extending off the highs. Although we may see a near-term reprieve from this level, the outlook remains weighted to the downside while below the August lows at 2147- a breach above this mark is needed to alleviate further downside pressure. A break lower targets the 23.6% retracement of the 2016 range at 2103 & the 100% extension of the decline at 2094(note that the lower median-line parallel converges on this level over the next few days).

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SPX 240min

Notes: A closer look at the index shows a sharp reversal off the 50-line today in New York with the advance now testing median-line resistance. If this week’s breakdown is the onset of a more meaningful reversal in the SPX, look for resistance to hold at 2147- this level converges on the 50% line into the close of the week.

From a trading standpoint, I’d be looking to fade strength while below the median-line targeting objectives into confluence support at 2094 – an area of interest for exhaustion / long-entries.

On the data front, look for the U.S. Advanced Retail Sales & the University of Michigan confidence surveys to offer up some volatility with Fed Chair Janet Yellen also slated for a speech tomorrow morning at the Boston Fed Conference.

Relevant Data Releases