SPX: Attention needed. -6% possible if this condition is met.

S&P has been trading inside a 4H Channel Up (RSI = 50.132, MACD = 13.590, ADX = 48.232) with the 4H MA50 (blue line) supporting. The negative fundamentals (China virus, disappointing earnings) ahead of the Fed Interest Rate Decision this Wednesday, can make investors sell initially (and ask questions later).

There is a strong break out level to consider and that is the 3,230 Support. Even if the Channel Up breaks lower, if that Support level holds, then the uptrend can be extended. If however 3,230 breaks, then selling make escalate to a -6.80% drop, similar to the one in July 31st - August 5th 2019. The RSI pattern has certain top making similarities.

If that condition is met, then we will set a downside Target Zone of 3,130 - 3,110.




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