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Bombs Away on the S&P

SPX cash hit the 8 day cycle centerline at 1320 late on Friday and immediately began to pull back. It had also hit a 2 day cycle projection of 1320. The 2 day cycle oscillator however did not get to the sell side by the close. They left that for this morning’s open after the futures sold off all night in Asia and Europe. The 5 day cycle oscillator had been on the sell side since mid day Thursday and never left that path on Friday. The projection for that cycle as of Friday’s close was 1301. After the opening moments this morning, it may have shifted to as low as 1297. The 2 day cycle projection after the first few minutes of trading also appears to be around 1300.

SPX cash opened below converging and declining 5 and 8 day cycle inner channel lines at 1306, which should now become resistance. The next support is suggested at a falling 5 day cycle channel line at 1300.

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

SPX Cash - click to enlarge

The SP futures (or ES electronic mini S&P) shave been trading lower since 6 PM NY time last night, and are now near 2 and 5 day cycle inner channel lines around 1297-98, which should be support. Resistance is at the 2 day cycle centerline at approximately 1307 and declining. 2 and 5 day cycle oscillators remain on the sell side at very weak levels, with only one of them having a slight positive divergence. A weak bounce later this morning should lead to lower lows this afternoon.

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

S&P Futures Intraday Chart- Click to enlarge

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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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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