Market Sells Off At Open, Hits Prior Pivot Support, But Looks Lower

SPX (cash) tanked on the open in NY after hitting its 2 day cycle projection late Thursday. The gap down triggered sell signals on 2 and 5 day cycle oscillators. These indicators had negative divergences versus the SPX double top at about 1296.50 near Thursday’s close and early Tuesday. The new 2 day cycle projection is about 1282.50. The SPX just broke 2 prior pivot lows at 1286.50 that brought in more selling, but the bungee cord is trying to snap back to that level. In addition to the 2 day cycle projection the next cycle support lines are indicated around 1282. So I’ll go with the 1282-83 area as a target for this morning’s move. Resistance is suggested at an 8 day cycle inner channel line at 1289.

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

The SP futures (or ES electronic mini S&P) have been weakening since just after Europe opened this morning. The Spoos have now dropped to the the first inner 2 and 5 day cycle channel lines at about 1281 and 1277 respectively. There should be some support around these lines. 2 day cycle indicators are very weak, and should form minor positive divergences before the low is in. That implies a lower low later today after a bounce from around current levels. The 5 day cycle oscillator hasn’t triggered a sell signal yet, but it should do so later today, assuming no big rebound.

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.

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

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