SPX Chart Is Flashing RED!

Switching to the March E-Mini S&P makes clear that it is much closer to a potential major top than the December contract. The latter still has about 30 points of running room before it hits a 2299.00 target, and the stop-loss I’ve advised for the single contract we still hold (as a tracking position, with a paper gain so far of about $8000) still obtains. However, I will treat the March contract as a separate case, since its chart, which is flashing red, demands no less.

Indeed, the feeble distribution rally to 2264.75 engineered by DaBoyz Sunday night on vaporous volume brought the March contract close enough to the 2267.50 target shown for us to infer that the sensational bull move of 2016 may have climaxed. In any case, I’d be very surprised if the futures were to blow past this number, a major Hidden Pivot resistance. That means I’ll be intently focused on the corrective move from Sunday’s top, since it has the potential to snowball into something BIG. Short-term traders are advised to shift to a bearish bias, given the fact that a major rally target ten months in gestation has come within 2.75 points of being fulfilled. Since the foregoing is not chiseled in stone, we should allow for an alternative scenario, as follows: If the March futures were to push decisively past 2267.50 in the next 3-4 days, that would signal more upside to the 2308.25 ‘secondary’ Hidden Pivot of an ABC pattern projecting as high as 2403.25 (Daily chart, A=1796.20 on 2/11/16): B=2176.50 on 8/23/16; and C=2023.00). More immediately, however, traders should focus on the 15-minute chart, which turned bearishly impulsive Monday with a 2246.75 print at 12:15 p.m. (Note: The hourly chart is still positive and would need a print at 2227.50 to turn bearish.)

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