After jumping above the upper edge of the downtrend channel yesterday SPX plunged no less than 30 points today! Now the question is if the lower edge (1,305 as of today) is going to resist the selling pressure. 1,305 is also the level where bulls expect a pretty decent support on SPX (see the daily chart).
Interestingly, the level were market found support today, 1314 was touched no less than 4 times since May 23rd.
Traditionally summer is a bad omen for stocks so staying short or out of the market until August-September is not going to be such a bad idea.
Since market was very choppy in the last 2-3 months EMAs crossing on hourly chart did not work very well so I had to consider either a slightly longer or slightly shorter time frame. Since I am exclusively in options right now I do prefer shorter time frames (same pair of EMAs on 30 minutes chart) but if you don't fancy trading too much I think going to two hours time frame instead of one hour is going to work well. On "FreeStockCharts.com" you can chose 1,2,4 hours time frames. If you are using a different program that doesn't allow you to plot your chart on 2 hours time frame just use the one hour time frame and double the values of the moving averages, EMA 50-EMA 100 plus SMA 240 as a confirmation.
Daily DMI tuned red after going slightly green yesterday.
Daily chart offers more details about the current market conditions but I'll talk about that tomorrow.
Have a great evening!
babaro
Interestingly, the level were market found support today, 1314 was touched no less than 4 times since May 23rd.
Traditionally summer is a bad omen for stocks so staying short or out of the market until August-September is not going to be such a bad idea.
Since market was very choppy in the last 2-3 months EMAs crossing on hourly chart did not work very well so I had to consider either a slightly longer or slightly shorter time frame. Since I am exclusively in options right now I do prefer shorter time frames (same pair of EMAs on 30 minutes chart) but if you don't fancy trading too much I think going to two hours time frame instead of one hour is going to work well. On "FreeStockCharts.com" you can chose 1,2,4 hours time frames. If you are using a different program that doesn't allow you to plot your chart on 2 hours time frame just use the one hour time frame and double the values of the moving averages, EMA 50-EMA 100 plus SMA 240 as a confirmation.
Daily DMI tuned red after going slightly green yesterday.
Daily chart offers more details about the current market conditions but I'll talk about that tomorrow.
Have a great evening!
babaro
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