The 200 Point Airpocket in SPX

Monthly

Enlarge these charts to see them.  

When the upper band was tested and proven to be a good resist point, price swiftly went down in the direction of the mean (middle band) and the coiled up to make a rally attempt after some filling in and consolidation in the late Spring.  The rally has since faded, and no new highs were printed yet for the year.  And so it still stands that rallies are being sold, and this month in particular has one of the topping tails similar to that of January, February, March, and for the most part June has had some degree of a topping (higher wick with a lot of distribution)

The horizontal line across is a marker that we are using to denote value and demand which is at 2500, this will definitely need to change and possibly move up because we are referencing the middle green band as a stopping point, and in the next month that is sure to change and drift higher

Weekly

The weekly candles here have the clearest reversal patterns (bearish turn arounds) and The first one in January was more of a full-bodied engulfing set-up, with just two candles.  The one in March was more of a test of the lows and then a confirmation that engulfed six weeks in one.  The last bit here is the recent turn around that could be described as a 3-candle pattern, and we believe it has more staying power because of the time it took to "wind up" so to speak.  

Daily

Obviously there is more noise on this chart because its a lower time frame.  What sticks out to us the most is the 2700 and a few points below, because that is a rally point for some of the bulls, who would believe its time to buy again, and most mid-range situations set up for short squeezes, where the bears rush into things thinking they will be ahead of the pack.

On the daily, it is more of a waiting to see confirmation of newer lows with perhaps faster momentum.  If there is any more of a text-book scenario of a 3rd phase of a down move this is it, and what I mean by that is stage one is the rally, stage 2 is the consolidation, and stage three is the break-out and in this case it has broken down just enough with a Vix creeping up again.

Trade Well!