As shown on the Daily chart below of the S&P 500 E-mini Futures Index (ES), price dropped this week through one support level of Fibonacci confluence and down to the next one before bouncing to finish the week just back above the first confluence level.
Volumes have been exceptionally high since last Friday. Whether the spike in volume on Wednesday's final drop is capitulation volume remains to be seen.
We'll need to see price hold above the 1850-1870 level and continue to rally and hold above the 200 MA (pink) around the 1900 near-term resistance level on increasing volumes. Otherwise, any further rally may simply be a dead-cat-bounce...particularly since we now have a lower low and the Daily uptrend has been broken.
Failure to hold 1850 may see panic selling enter this market, especially if the SPX:VIX ratio drops below the 60.00 level on increasing downward Momentum, as I mentioned here.
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Bulls Will Need To Prove This Bull Market Is Still Alive
Published 10/19/2014, 12:31 AM
Updated 07/09/2023, 06:31 AM
Bulls Will Need To Prove This Bull Market Is Still Alive
Latest comments
Thank you for taking the time to write and post. I'm expecting very disappointing Chinese 3rd Quarter GDP results this Tuesday, sending the SPX to the 1700s.
China GDP is even more manipulated than US GDP. It came out higher than expected, but that probably is not the reality as China heavily manipulates all of it's financial reports. I agree with your belief that SPX is headed lower. It is just a matter of time.
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