Let's revisit the weekly SPX chart. I have presented this over several weeks now.
MACD is on the verge of crossing below it's signal line. If correct, it is possible a 4% or so correction may be anticipated once the cross occurs.
Taking an average of 1100, a 4% correction takes us towards 1060 or so. Of course this assumes price behaves the same way as it has in the past six crosses.
If this occurs, 1060 would result in a break of several trendlines and should be considered very bearish.
I believe the OIH is also in the mist of a larger correction. So far, price is confirming a completion of the wedge (Ending Diagonal) I highlighted on this post.
The last MACD cross (weekly) resulted in the large sell off. We have a cross once again and it is occurring after what counts as a nice zigzag. Whether the zigzag counts as a wave 2 or b, one should expect a wave 3 or c to take prices back near 60 or so.
Additionally, I believe a Head and Shoulders pattern is in the works. 110.46 would be the key neckline break. It is interesting that price touched this level exactly back on 10/2. If the H&S plays out, a move to 88 would be expected.
So given the MACD cross, a good looking zigzag, an ending diagonal (wave c) and a potential H&S in the works, I say chances are pretty good that the OIH is looking to pullback significantly.
As for the RUT. Could we have seen the completion of minute [ii] today? I adjusted the trendlines for the wedge. MACD 60 min shows a steep angled drop towards the center line is approaching.
Will have to see what price does tomorrow.
No comments:
Post a Comment