Tuesday, September 23, 2014

Equities: Where to Now?

Yesterday we were talking 1000 points of downside. This morning, with 107 of those points in the can the question is what comes next. On a very short term basis the 1978 bottom of the last decline is support. Here are some further considerations from Slope of Hope:

Two Down, One to Go
SPX broke down hard yesterday and closed near the lows, giving bears their first complete day in a while. SPX broke back below the daily middle band and, as long as we don’t see a daily close back above it, the next obvious targets are the daily lower band at 1985 and the 50 DMA at 1976. The band pinch here means that it is very likely that SPX will start an extended band ride in the near future. The bulls had a shot at starting an upper band ride last week and couldn’t sustain it. If bears can get SPX to the lower band then they get a shot at starting a lower band ride instead. SPX daily chart:
140923 SPX Daily Trendlines BBs MAs