SPX cash opened weak, falling through the 5 day cycle centerline at 1342, signialing the onset of a down phase in that cycle. The 8 day cycle centerline is at 1338. If that area breaks, the market could trend weaker for the better part of this week. If it holds, then the bulls will still be very much in charge. The initial 2 day cycle projection of 1339 has already been broken. If the 8 day cycle centerline breaks, the target of the move could be the next support lines coming up at about 1333.
Here’s the cash SPX chart (time stamp in lower right corner).
The SP futures (or ES electronic mini S&P) have been trading in a tight range of 1331 to 1337 since opening Sunday evening. For most of the night and pre market they have been locked between the 5 day cycle centerline at 1331 and the 2 day cycle centerline at 1336. The 5 day cycle centerlin is still slightly uptrending while the 2 day cycle centerline is flat. A breakout from either should signal the direction of the next short term move. A couple of 2 day cycle indicators are edging toward buy signals, but in general the indicators are mixed an inconclusive.
Given that key support lines in both the cash and futures charts are holding, the uptrend must still be given the benefit of the doubt. That would change if the 5 day cycle centerline on the futures and the 8 day cycle centerline on the cash are broken with conviction.
Here’s a look at the Spoos 30 minute bar chart (time stamp in upper right corner).
Blue lines more or less represent the nominal 5 day cycle. Red lines more or less represent the nominal 2 day cycle. The first oscillator more or less represents the 5 day cycles. The 3 lower oscillators more or less 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.
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8 day cycle centerline just broke slightly. If pivot low 1337.50 breaks, 2 day cycle projection would drop to 1335. But if it holds, they probably run back to 1345.