So, Where Are We Now on SPX ???

Let's dissect and see where we are with SPX index, this week....


SPX - Monthly Chart


On monthly chart, my opinion, "Bearish".....how else to technically view this chart... if you possess a different technical opinion..i am all ears...


SPX - Weekly Chart


On the weekly chart, it is totally quite the opposite to the monthly outlook. Technical signals show "bullish" bias and quite a bullish one indeed.


SPX - Daily Chart


But on the daily chart, we have a contentious situation developing. We see a "head and shoulder" pattern formation, BUT the rally that started in Nov08, is technically still in play. That is, as long as the ~850 region support holds up (denoted by the green dotted line).
In addition, RSI and MACD are still in upward momentum, although granted, MACD seems to show a slight tilt downwards.
However, the MA10 is clearly moving upwards to meet with MA50, and all in all, index are coming to some sort of "equilibrium" pricing, which can mean a tight trading range for some days ahead. This also coincides with the current lowered VIX reading at about 44.5 (suggesting lowered volatility)

Nevertheless, it is important to accept the fact that the "neckline" of the Head & Shoulder formation has been "breached". The ONLY consolation is that H&S formation is usually potent on primary bullish and toppish price scenario, one which SPX hardly qualifies herself to be at this moment. Still, let's respect this "bearish" formation. Respect means, manage our potential downside risks accordingly.

Technically, if this H&S is valid, then the technical target drop for SPX is at ~770 (ouch !!!) or about 100 points down from current level...