Currently it looks like we are in a channel the trendline from the middle of April along with the 20EMA is providing support while horizontal resistance levels are providing the resistance.
Purple=SPX bounces off the up trendline that started at the end of April(hashed light blue). or the 20EMA. SPX now has a trendline and support giving the market the momentum to rally to 875 and above.
Magent= SPX follows purple but fails at the 20EMA and trendline causing a sell off.
Light Blue= Market rallies past 850 up to 875 and above failing at the grey trendline or the top of the channel. SPX falls back to the 850 and the hashed trendline, finding support and rallies back up through 875 after forming a Triple Watch and goes to the top of the channel line at 900.
Dark Green= Follows the light blue path but instead of rallying back from the 20EMA and trendline, it fails and heads lower.
The key to watch is if the market follows this channel and fails to touch the upper channel it should indicate that weakness is occurring. Also if the market does not find support at the EMA's it will show weakness. With the way the dollar has been falling, and energy going up, depending on today, I could see the Light Blue being the most likely.
