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).
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.
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