I leave you this week with a big picture of the S&P 500 (SPX), which shows this week’s plunge from 1461 to 1381. As of Friday’s close, the SPX was trading about 4 points off of the low of the week, versus 74 points off of the high.

Judging from the juxtaposition of the price structure with the nose-diving RSI (momentum) gauge, the SPX would appear to have some unfinished business on the downside.

Let’s notice that prior declines within the August 2004 to February 2007 channel held in and around the 1-year moving average. Should this current decline press into the area of the 1-year moving average, then we should expect a next target in the vicinity of 1336 to 1300.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.