SPX: Rock Solid?

Looks like a bearish diamond formation is revealing an apex around the 4150 level on the SPX, as shown on the following daily chart.

A break and sustained hold below could send the SPX tumbling to 4000, or lower to its next support level at 3700.

Any convincing sustained move higher, will be dependent upon the SPX:VIX ratio meeting the following conditions (daily ratio chart below):

  • the ratio price retakes and holds above the 50 MA
  • the RSI retakes and holds above the 50.00 level
  • the MACD and PMO form and hold new bullish crossovers

However, achieving those conditions may not be so easy, inasmuch as the recent uptrends have been broken on the RSI, MACD, and PMO indicators.

So, the SPX could be in for more chaotic whip-saw swings until it breaks and holds above or below the entire large diamond pattern and forms a new trend in either direction.

Disclaimer: All of my posts (and charts) contain solely my own technical analyses/opinions/observations (which may contain errors or omissions) of a variety of markets and are ...

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