Good Morning everyone. Looks like the futures sold off more over the weekend breaking down from the triangle pattern it was in. Now we'll start looking for support at the falling black trendline pointing to 2305 currently. For today though it's not likely to drop that much more. The move down has been very controlled so I'd expect a bottom to be put in shortly after the open. After that we could see a rally later in the day and into Tuesday, but I don't think this selling is over with. The 2300 SPX (230 SPY) level seems very likely to be tested this week. So any rally today and/or Tuesday will likely reverse and head back down later in the week. It's looking too me like we'll see the 2300 level tested by this Thursday or Friday if the futures play out as I think they will.
Now, for resistance on the way up... the 2340-2345 zone where those two black trendlines intercept is the most obvious, and then the falling blue trendline around 2350 currently... but it should be in the 2340-2345 area too by Tuesday I'd guess. What I think we might see is an "inverted head and shoulders" pattern setup that fails late this week. The left shoulder would be the 2332 low on the 21st/22nd. The head would be put in today either already at 2317 or some retest today that dips a little lower. Then the rally up later today will probably put in some type of ABC pattern. The A up might goes as high as 2340? Then the B down should fool everyone into shorting it, but it might stop at 2320 to make the right shoulder. Everyone will see it and go long as the next move up should be a C wave in that ABC pattern and the breakout for the inverted head and shoulders pattern.
If this happens it "should" be the trick SkyNet plays on the bulls as the pattern should fail and produce another drop that takes out the head and finds support around the 2300 area. This is my preferred scenario but we all know that SkyNet doesn't give me what I want very often. My 2nd scenario would be some kind of bottom again early today then some weak chop to make a small rally later but not coming close at all to the 2340-2345 resistance zone. Instead it would just hang around the current price level and possibly grind up to as high as 2330, but not high enough to let the trapped bulls out. Then we'd see the move down to 2300 or so by tomorrow if this second scenario plays out. I favor scenario one as I see positive divergence now on the MACD's but I'll take whatever SkyNet throws at me (kinda don't have a choice... LOL). Anyway, that's what I see possible for this week.
P.S. If you don't see a new update tomorrow it's because I'm putting down new hardwood floor in my computer room and the computers aren't all hooked back up yet. I'll be back online as soon as possible.