Market Hits 2 Day Cycle Target of 1340 On Open, Dip Buyers Awaited

SP futures (or ES electronic mini S&P) have been tanking since 3 PM (NY time) yesterday afternoon when it became apparent that the Greece deal was no deal and was going down. The Spoos broke the 2 and 5 day cycle centerlines around 6:30 PM and kept going through the night. As of this writing, 2 day cycle oscillators are still buried on the sell side. The futures are holding just above a descending 2 day cycle line now at 1332, with a 5 day cycle line just below and just beginning to turn down at 1331. This area is now make or break support. The next support would be around 1322.

Here’s a look at the Spoos 30 minute bar chart (time stamp in upper right corner).

Blue lines represent the nominal 5 day cycle. Red lines represent the nominal 2 day cycle. The first oscillator represents the 5 day cycles. The 3 lower oscillators represent the 2 day cycle. Cycles vary in length and are not the sole component of price action. Outside influences and random noise may have a significant impact at any time, often unpredictable. These charts and their interpretation are meant for educational, informational, and entertainment purposes only and are subject to the Wall Street Examiner terms of use.

In the SPX cash market, the open was bloody, down about 13 at the moment, right at an 8 day cycle line at 1339. That could be support. The next support would be a rising 5 day cycle line coming up at 1336. 2 and 5 day cycle indicators had been in negative divergences throughout the day yseterday but had not flashed sell signals. They had to wait for this morning’s open, but the futures had gone to the sell side right after the bell yesterday.

Based on the action in the opening moments, a new 2 day cycle projection of 1340 has already been hit, suggesting that the market will stabilize and bounce back a little for at least the next few hours. Even a tentative 5 day cycle projection only points to 1339, so there’s not much for bears to get excited about. From this perspective it looks as though dip buyers are likely to show up yet again. If they do, the first resistance test would be at 1342. If they get through that, then the next target would be 1347, where the going should get a lot tougher.

Here’s the cash SPX chart (time stamp in lower right corner).

On this chart the yellow lines correspond with a nominal 8-13 day cycle. The cyan lines correspond with the 5 day cycle. The lower oscillators correspond with a nominal 2 day cycle (light blue) and a nominal 5 hr- 1 day cycle (red).

You can follow my real time intraday cycle updates with cycle price targets during the day at The Stool Pigeons Wire at Capitalstool.com.

The daily cycle charts are updated in the Wall Street Professional Edition market update every day. Get daily updates on the 4 week, 6-7 week, 13 week, and 6 month cycle projections along with regression channel and equal width channel support and resistance chart updates daily in the Wall Street Examiner Professional Edition Daily Market Update. Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here to become a member and get instant access to the current report and all past reports.

Day Trading Department

Tags: Amp, Bears, Centerlines, Cycle Indicators, Entertainment Purposes, Greece, Oscillator, Oscillators, Random Noise, Signals, Significant Impact, Sole, Sp Futures, Spx, Target, Time Stamp, Wall Street, Yesterday Afternoon

This entry was posted on February 10, 2012 at 9:44 am and is filed under Day Trading, Today's Markets, Trading and Technical Analysis. You can follow any responses to this entry through the RSS 2.0 feed.