Wednesday, June 5, 2013

SPX - Which Scenario Will Prevail?

Now that 1620 on SPX futures gave way, there is no reason to think that this sell-off is any different than the other two I pointed out on my daily chart below. Vertical white dotted lines show where I think we currently are in reference to those previous times. So if those scenarios are to repeat, there may be a bounce between right here to 1590, possibly capped by 1620 - 1633, followed by sideways consolidation in the range, after which further weakness may ensue. My guess is that 1552 - 1576 (previous two bull market highs) on SPX will provide enormous support. Should 1620 and 1633 be regained, that may negate my range-bound outlook, and the rally to new highs may resume. One thing is for sure - this market will not be kind to traders who can't change their mind quickly enough.

click on charts to enlarge

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