S&P 500 Index – clearly bearish below 2,080-2,084
· Two major developments this week which suggest that the Index should continue and drift lower over time:
1) Monday's sell-off broke the 2,067 low, the break negates the path of higher highs and higher lows established on the chart since October 2014.
2) The break below 2,067-72 also triggered a bearish H&S pattern, the pattern targets a move to 2,025. The neckline of this pattern is 2,080 and while the index holds below it a move lower should only be a matter of time. The Index did have an intra-day bounce above this level in yesterday trading session but stalled at the 38.2% Fibonacci retracement level at 2,084 and eventually closed below it. I cannot rule out further choppy price action around 2,080 but eventually believe we move lower
· Support now is this week low and the 200dma at 2,054-2,056, a break below this level targets 2,025
· Again, from a longer term perspective, I continue to favor a much deeper retracement (correction for the 2011-2015 bull cycle) and expect a minimum retracement to 1,885 over the months ahead. For charts and further explanation please refer to previous recaps on the Index.
Strategy: Short 2 units from 2,119, target 2,025 and 1,885 with a stop loss at 2,140
[cid:image001.png@01D0B4BD.56174A90]
VIX Index – Bullish above 14.02-14.90
· The Vix it trying to fill the gap from Monday which stands at 14.02-14.90
· While it remains unclear if we fill the gap Monday's impulssive breakout confirms a bullish wedge pattern, the pattern target is 26.15 and I believe we reach this target in the weeks to come.
[cid:image002.png@01D0B4BE.06DC6F40]
2015 TECHNICAL TRADE IDEAS
[cid:image003.png@01D0B4BE.06DC6F40]
