Last Friday’s pre-opening forecast worked out very nicely. I just drew it backwards.
Initial support can be found at the white .618 at 2053.29 and the rising white TL off the Oct 15 lows. After that, the SMA20/50. And, in the event it pushes lower, a backtest of the falling white channel (the red S.)
I thought the initial drop would tag the white TL from mid-October, and the close would be at the .618 at 2053.29. It worked the other way around.
Another factor weighing on equities: oil. Crude light tested its previous lows late Friday. Though it bounced on OPEC General Secretary El-Badri’s comments, it’s still looking rather wobbly.
As such, I see no reason to adjust Friday morning’s chart/forecast: a test of the SMA20/50 — and a potential IH&S right shoulder if those don’t hold.
UPDATE: 10:40 AM
So far, so good on this morning’s forecast.
It’s had three stick saves (on Jan 21, 22 and 25) that also propped up SPX (ES shown below for charting purposes.)
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