$SPX Projection

The white circle on the above chart represents my current price target, approximately 1,050, on the S&P 500. This is the first Fibonacci retracement confluence area.

The red circle indicates a price at which the pull back maybe over, approximately 1,110.

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$SPX - Reversal or Correction?

The above chart is the 5 year daily chart of the S&P 500 with the fib ranges, an inverse H&S with the target and a possible pull back channel.

There are three ranges noted. The longer orange range from top to bottom, the medium purple range from top to consolidation and then most recent range, from the bottom to the most recent high.

The inverse head and shoulders formed at the bottom had a target of rought 1,200. The channel shown in the chart is one way that the target could still be reached given a pull back - the price action is moving the bottom 50% of a channel.

Currently, I am favoring the bears and have a small position in SKF and SMN. If this pullback really has legs I will be looking for a position in SDS as well. The stochastic and MACD show that there is still room.

Perhaps it was this week's political intervention that cut the rally short of the target - on the other hand, the target could still be reached and the up ward trend remain intact.

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SKF

Strong day for SKF with improving technicals, could be more movement to the downsing in the financials. Bought small position into the close of today to hold over the weekend.

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SPX and EUR/USD diverging

The first pair of charts are the one year daily SPX on the left and the one year daily EUR/USD, on the right. The light blue line is the 8 day EMA with the grey lines being the 2nd deviation. The yellow line is the 21 day SMA.

The SPX and the EUR/USD were trading bottom left to upper right until December when the Euro began to weaken against the US Dollar.

The second pair of charts are the same comparison between the SPX and the EUR/USD from December forward. Currently, the strengthening US Dollar has not been reflected in the SPX.