Wednesday, May 27, 2015

SPX Update: "Momma Always said: 'Resistance is as Resistance Does...'"

Before I get into the charts, I want to apologize for the sporadic updates of late, and alert readers that my energy and time are going to remain tied up in a significant personal issue for roughly another month.  I'm going to try my best to publish at least two updates each week throughout this time, but I do want to warn everyone in advance that those updates may not fall on the usual days, since they will be done on a "time-and-energy-allowing" basis throughout this period.

With that announcement out of the way, let's get right to the charts.  For the past couple weeks, I've been mentioning that SPX 2136-40 appeared to be the next key resistance level.  Last week, SPX stalled at resistance about a point shy of that zone, which ultimately lead to yesterday's steep drop.  Presently, there are still a ton of options on the table.  The diagonal shown in last Thursday's update (and in the update of May 8 before that) remains credible:

The chart below contains some additional details in the annotations: 

Finally, the SPX daily chart:

In conclusion, the market has not tipped its hand in a meaningful way for a long time, which suggests it's gearing up for a sustained move in the reasonably near future.  Because of the nature of the price action for the past few months, I'm still slightly more inclined to think we're in the final stages of a terminal pattern, but, technically, we can't yet eliminate the possibility that this is a bullish coiling pattern, so we should continue to remain alert to both sides of the trade until the market gives us something a bit more conclusive.  Trade safe.

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