1/6/2014

With losses today, the correction from the Christmas-time rally appears to be nearing it's home stretch. I don't know if we'll see a red close Tuesday, but I do expect new lows before any turn towards the up-side can be taken seriously. Breaking decisively above 1830 on the S&P should end the down trend and the next fib level is around 1818 - 1820. The lower end of the current falling channel spans the 1815-1810 range, so these levels could very well be tested.

As Oscar Carboni points out in his latest video, the S&P daily chart now looks like a bear flag. It's also worth noting that the Monday low is below the lower band of that flag. Oscillators on the daily appear to be coasting smoothly towards over sold, but have not yet reached their destination

We should keep in mind, this down trend did technically bounce off the giant monthly channel. The chart is below for reference.

S&P 500 Daily Chart

S&P 500 Hourly Chart

S&P 500 Monthly Chart