SPX: Follow Up of the Short Term EWP
Sorry but today I don't have any inspiration to write a "productive" technical update so I will keep it extremely short.
Yesterday bears failed to trigger sell stops below the critical pivot support at 1422, instead dip buyers prevented a slump and achieved a potential bullish candlestick with a large lower shadow.
Despite the set up clearly favors the bulls I remain skeptical as long as bulls seal the deal by reclaiming the 20 d MA, which stands at 1445.
The internal structure of the down leg off the October 18 lower high is not clearly impulsive hence maybe we don't have a terminal pattern.
This is why in the daily chart I put a question mark at yesterday's lod.
This price action at a pivot support + positive divergences on both the McClellan oscillator and the RSI could allow the end of the corrective pattern from the September 14 high. But we still have a sell signal issued by the Stochastic on October 19 that has not been reversed.
If yesterday's bottoming candlestick fails then the obvious potential bottom is located in the area of 1396.
We have to play close attention to the McClellan Oscillator since it keeps showing muted selling pressure creating a large positive divergence. This is a serious warning that price is involved in a bottoming process.