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Support Holds in Opening Selloff

The SPX (cash) has bounced from a 2 day cycle projection of 1266, but both 2 and 5 day cycle indicators have just turned down, suggesting that more downside is likely, but even the 3 day cycle projection only points to 1264 and time counts suggest that both 2 and 5 day cycle lows may be due this morning. The cash chart shows support at 1265-66. Here’s the cash market chart at 10:11 AM NY time.
SPX Cash - click to enlarge

S&P futures (SP and ES electronic mini) got down to 1260, where the first 2 day cycle line was located. The first 5 day cycle line is just below that approximately 1257. The futures would need to break those levels to get any downside going. Likewise, the cash would need to break that 1265 area. As with the cash, 2 and 5 day cycle indicators on the futures are on the sell side. A slight positive divergence has developed on one of the 2 day cycle indicators on the futures. That has not happened yet on the cash chart.

Assuming that a bounceback is under way, the critical resistance levels will be around 1271 cash and 1270 on the futures. If those levels hold, then another downdraft would probably be forthcoming. If they don’t then look for a meltup.

Here’s a look at the Spoos 30 minute bar chart as of 10:11 AM NY time.

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.

S&P Futures Intraday Chart- Click to enlarge

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