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Tuesday, September 24, 2013

Daily update 9/24

SPX closed below 1700.  Here is the daily chart.

The pullback continued today just a bit.  There have not been many times this year when SPX was down four days in a row.   Closing below 1700 should be bearish, but we are only marginally below and we ended the day slightly above yesterday's low.  Here is a look at the SSO 60 minute chart.

First thing this morning we tested support from the low of 9/16.  The dip buyers stepped up to the plate and mounted a rally all the way up to the 50 SMA.  However, the bears struck back and the market sold off all afternoon.  That leaves us with a potential head and shoulder top pattern on this time frame.  Will we break the neckline and continue down or bounce from here?  The volume pattern is showing big red bars dominant since 9/19.  The bears may have a slight edge.  The bulls still need to get SSO above the 50 SMA and keep it there to regain control.  A break down through the neck line should target the daily 50 SMA on SPX at 1679.


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