Update - Monday's S&P 500 Daily Chart:

The lower wick of today's candlestick tagged the lower Bollinger Band like I predicted in this weekend's video, and rallied fairly strongly during the afternoon...The only problem is today's lack of Volume...It was the lowest Volume day this four month chart shows!...So in my opinion, it isn't a very convincing attempt at digging itself out of a hole...For the moment, the lower Bollinger Band is upticking, but if it starts down again that will be a sign or trouble for the Bulls...

The support level at 1100 from late July has already been breached, and if the support level from mid-July at 1060 gets taken out I'm fairly certain that the $SPX will go down to test the 1010 level of support from the beginning of July...If or when that level of support fails, I'm predicting it will fall to between 925-950 before bouncing on an Oversold Rally...

The fast line of Stochastics hit very Oversold territory, and the fast line did turn up ever so slightly today...But the CCI did not uptick, and the Histogram of the MACD took another sharp downtick, along with both the fast and slow line...So what if the market barely closed positive today?...The indicators say it was a down day!...And Stochastics being Oversold can go on for a very long time...Just look at how Overbought the market was for months as it rallied off the March '09 lows...



One of my students asked me why I don't analyze the monthly chart?...I do, but since I'm a free member of stockcharts.com, I can only get daily and weekly charts...And I'm basically a very short-term trader, and all of my trades are Day Trades that usually only last an hour or two at most...Buy & Hold is obviously not working these days, as the market is right back where it was ten years ago...

Here is a four year/weekly chart of the $SPX I drew up yesterday, that shows a repeating pattern of three bearish Head & Shoulders chart patterns, and one bullish Inverse Head & Shoulders where the head (bottom) was put in last March 6th...This chart to me signals we are about to enter another serious downtrend sometime in the near future...It's obvious that the US recovering has stalled out, unemployment hasn't improved, consumer confidence and spending are low, and China and Japan are slowing down too...

Add to that the uncertainty of the situation in the Middle East this week, as Russia gets ready to load nuclear fuel rods into Iran's first atomic power plant which will eventually yield weapons grade uranium...There is the possibility that WWIII may be coming to a theater near us soon if Israel attacks Iran like they did when Iraq tried to do the same thing...And let's not forget the tension surrounding North Korea lately, and the deteriorating situation in the European Union...It appears there's all kinds of trouble on the horizon from many different areas...

Add all of the many negatives together, and it looks like the market will be headed down...That's what the Fundamentals and the Technicals are saying to me...Of course, that's just my humble opinion...I mean really...What kind of good news can we possible get that will make the market go up right now?...



Here is one more look at a chart from this weekend's video that shows the final Head & Shoulders from the chart above...It sure looks to me like the market is starting to roll over...



Good Luck to all...
zigzagman