Technical Outlook:

  • A significant day technically, for the S&P 500 (SPX) yesterday. bearish stock market triangle sell-off moving averages 30 minute chart
  • The rising trend-line off of the February lows was broken. 
  • The triangle going back to early September that the market had been trading in, was broken to the downside as well. 
  • Still there was an end of day bounce that took price off of its lows of the day by a considerable amount, even though price action was still down -1.2%. 
  • Notable uptick in volume for SPDRs S&P 500 (SPY) yesterday. Volume was well above average and nearly three times the amount we saw the day prior. 
  • There are some notable gaps left unfilled on this chart – most notably the ones from the February low bounce which would require a significant correction, and the second one being from the Brexit rally back on 6/29. 
  • CBOE Market Volatility Index (VIX) had a big day for itself yesterday, rising 14.8%, but well off of its highs for the day, which has become obligatory for the VIX throughout 2016. 
  • Dip buyers are not afraid of this market, at least not yet. Dips are still being bought as was seen at the close yesterday, with the continued expectation that the market will always rally in their favor. It is a dangerous mindset that will eventually burn them bad. 
  • SPX 30 minute chart looking dramatically weakened and out of the 2-week chop area. It shows 2120 as being the next logical area for the market to test. 

My Trades:

Chart for SPX:

SP 500 Market Analysis 10-12-16

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