meandering monday, page-23

Here is the SPX 4 hour with the range from the low on 18 August to the high on 23 September.



You can see the SPX found support on Friday at a 61.8% retracement of that range. It also found support the week before at a 38.2% retracement of the same range.

The range down now for the S&P500 is 60.2 points. Here is that range down for the SPX.



If a rally for the S&P500 fails at or below the 1/4 (23.6%) level, which is 1035 (1034.16) that is confirmation of a fast trend down in progress, conditional upon the the index going to new lows on the day it turns down, or if it turns down later in the day, the following day. Once it starts down, it shouldn't stop going down above Friday's low, if a fast trend down is what is happening.

The down move should resume without any doubt, if it is a fast trend down. If it doesn't go to new lows straight away, something else is going on other than a fast trend down. For example, the index could be basing.

Any rally from here should give a clearer picture of what the index is doing and as we have a swing low to gauge any move up against, the strength of this move down should be known early to mid this week. If the rally makes it over the prior swing low, then there is no fast move down happening.

I'm still very mindful of the fact that the index turned down on 23 September within 2 points of a 1/4 extension of the rally 8 July to 28 August, and that a 1/4 extension of a prior rally is what ended the '38 rally.

A 1/4 extension of the rally over the same time period is also where the XAO stopped on 17 September (4647.8) after those two days of huge rally. The momentum has since carried the XAO a bit over 10 points higher but the significance of the resistance at that level is clear.

I don't want to give up on the rally just yet because of the factors point to it running out to 15/16 October, although price is on a knife edge imo and if it goes any lower the rally is very likely done.

By mid week the picture should be clearer and by Friday what is going on should be apparent.