SPX: Market rebound, for now.

3 dic 2018

October: A Damaging Month
Serious technical damage was done to the index in October
11.5% downfall from the high of Sept 21 to the low of Oct 29
Equity markets adjusting to new reality of higher interest rates

Rebound from Oversold Condition
Oct 29 seemingly marked the (temporary?) end of the current correction
Rebounded at 2640 which represents the 23.6% Fib retracement from the up-move started in April
Index closed on Friday nearly exactly at the SMA 200 support (recently turned resistance)
Index looking to open strong on G20 hope, higher than SMA 200 and close to 2820 resistance
Long for now in small size and with tight stop losses



What to watch on the upside
Short-term tech indicators have turned positive for now
Hopes for a XMas Rally are still live
Index expected to rebound strong
Watching close above SMA 200 at 2762 and break above 2820

What to watch on the downside
“Death Cross” still live
Beware of fallback to the 2640 double-bottom support

4 dic 2018

Nota

Indecision as the market sits exactly between the SMA 200 and its next resistance. Could have some more steam from here but this needs to be confirmed, esp. in context of highly visible Apple downgrade. Staying prudent at the current levels.

6 dic 2018

Nota

Gravitational forces have taken the index down through two support levels in one go (SMA200/50). This attests to the current weakness, even though we are seeing no panic (yet). Pre-market today, it seems the S&P hovers slightly above its double-bottom support at 2640. I expect that there should be some rebound from there, but who really knows?

If we rebound, the questions will be how far, and for how long? If we break through the double-bottom support at 2640, it will be pretty bad for the bulls, as the bears cheer. Closing below 2640 would be a worst-case scenario.