Hump Day

Don't get to bearish, while the market has moved off it's highs it is nearing oversold and could give the market a short-term bounce.

The gap at 1050 is still open and the pressure on the market is still down so this gap may be filled before a move up. One thing to note is the positive divergence on RSI, the market has made lower lows on the hourly and RSI has not followed.

The 1050 level is now very important for this market, it is the nearest remaining gap and the up trendline from March. A move to 1050 also completes the descending triangle.

NYMO has moved below -80 and perviously this has started rallies since March.

Short-term the market is showing signs of oversold, so a bounce may be coming. Internals are weaker during this decline so the chance of a strong rally to new highs is less likely then the previous rallies.

Never Leave Home With Out It

AXP- Weekly Line Chart

35.20 is a key level for AXP, this level represents it's 2002 highs and it's 2008 support before it tanked. AXP has closed above this level on a daily time frame but has not closed above it on a weekly time frame.
MACD histogram has been diverging from the price action and it is overbought on a weekly time frame. A break above 35.20 would be bullish but there may be a lot of resistance from that level, 36.03 is a 50% retracement from it's high's in 2007 to the 2008 lows.

Triangle break

That was a fun day!  The bulls looked like it was going to party but then whammy the market drops.  I mention this morning if SPX was to test the 1075 level it would break, how many technical analysis books describe a "triple bottom".  It doesn't happen.

The descending triangle broke as did the 20 ema and both were broken easily.

The gap at 1050 still remains unfilled and looks like it could be filled soon with a short-term down trend now established.  I am still looking for the major trend change day in the first few day in November, either the new down trend breaks or the up trend since March breaks.

There is a chance of a retracement back up to 1070-1075 or the bottom of the descending triangle, as the market is nearing oversold.  The volume ratios are nearing oversold conditions as the down-volume to total is nearing its upper range and up-volume to total is below it's range.

New Fall Trends

SPX filled it's first of 3 short-term gaps on Thursday and this area became support on Friday.  The market tried to break through it but was unsucessful each time, as buyers stepped in and bought at that level. 
SPX has now a short-term down trend from Wed to Friday of last week.  The key area will remain the support at 1073-1070 and the more the market test this level the weaker it becomes.

The 1070 level is more import on the daily chart.  On the daily SPX a descending triangle has formed, although it is young and not well defined yet, forming with only a few candles. The bottom of it is the 1070 level, which is also the 20ema.  A break of this descending triangle, which would make a rough measured move from 1100-1075=25pts.  This would put SPX right at the second gap that has yet be filled at 1050.

Wait a second!

What was this "selling" at the close.  How can they do that?  You are suppose to hit the buy button at 3!
Finally some action in the market.  I haven't been posting, one because I've been busy but two the market sucked.  Everyday "The market is up", and some pundit is screaming "We have recovered, go out and spend, have unprotected sex, eat raw meat, earnings are doing great".  Each day the market ripped up and all you had to do was pick three letters and hit buy.

The bears finally did some damage today.   The first thing that should be smacking you in the face, is the beautiful double top.  The bears have claimed the 1095-1100 level their house and they will defend it. The selling was quick and fast today, breaking the 20 and 50 ema.  It stopped in no mans land close to support but not there, now the momentum may be down and that gap is looking like it needs to be filled.
One thing to note on this chart is the text book negative divergence.  Look how SPX made highs and each time MACD, RSI did not make a new high, it just trended down.  That my friends is BEARISH Divergence.

The Daily chart shows the divergence too and it's indicators look ready to roll over!

The divergence is clear in this chart and the negative trend in the MACD.  If the rally was a true rally as it was in March and July, MACD would have made new highs, confirming the move.