Nearing the Bear Panic Point

The S&P 500 (SPX)  is close to the declining trendline from the January 2022 top and the 200 – day moving average (MA).  A move above this important resistance could trigger massive, short covering and bring in new  long side trader’s.

The panic point is around SPX – 4,000.  Daily momentum suggests a move above the panic point.  Intraday momentum implies a short-term move down before decisively breaking above 4,000.

The daily SPX chart courtesy of Trading View illustrates the longer- term momentum.

Daily MACD has a bullish lines crossover.

Daily RSI has yet to reach the overbought zone above 70%.  Additionally, note that on 01/11/23 RSI was at 58.16 with the SPX at 3,969.60.  On 12/13/22 with the SPX at 4,019.64 – RSI was 56.56. This bullish divergence implies the SPX could soon be trading above 4,019.64.

The 15 – minute SPX chart shows the short-term momentum.

The 15 – minute MACD has a bearish divergence.

The 15-minute RSI has a double bearish divergence.

The SPX is also close to Fibonacci resistance at the .618 retracement of the 12/13/22 to 12/22/22 decline.  The exact level is 3,972.24 the SPX high on 01/11/23 was 3,970.07.

There is also another Fibonacci coordinate close to 3,970.07.  Note there’s an Elliott impulse pattern that begins at the bottom on 01/03/23 at 3,794.23. The length from this low to the presumed Minute wave “iii” top at 3,950.57 is 156.24 points.

Multiplying 156.24 by .618 equals 96.55 added to the presumed Minute wave “iv” bottom of 3,877.29 targets 3,973.84 which is very close to the prime coordinate at 3,972.24.

The U.S December- Core CPI data is due out at 8:30 AM – ET.  Short-term momentum and Fibonacci resistance suggest a  multi – day decline could be triggered by the CPI report. 

If  the report triggers a rally the SPX could move up to the 4,000 area.  If the SPX moves above 4,030 area,  it could open the door for a move to 4,100.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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