SPX and the Kiss of Death (September 2022)
SPX has received the “Kiss of Death” in the month of September.
A consolidation range existed from Dec 2021 – May 2022 in which June closed below the support level and suggesting a potential move toward 3444.21. At the same time June closed below the 21 EMA, this set prices up for either the “Kiss of Death” or the “Breath of Life”.
July closed back above the 21 EMA completing step 2 of the 3-step process in determining direction.
At this time prices needed to close a month either above 4140.15 (for “Breath of Life”) or below 3636.87 (for “Kiss of Death”).
While August did show a rally above the 4140.15, we didn’t get the close we required to complete the “Breath of Life”. September however did close below 3636.87 completing the signal and suggesting that prices are going to push down further.
Other examples of the “Kiss of Death” include September 2008 and January 2001.
The close below the support has suggested the potential for a negative push toward 3202.35. Both price targets from June and September are open and viable price targets.
The 6-period stochastic (size of the consolidation range from Dec 21 – May 22) is now showing that prices are at the bottom of the 6 period range. The 4-period stochastic (size of the consolidation range from June – September) also is showing that prices are at the bottom of the 4 period range. This does not mean “over sold”, this demonstrates that prices have pushed the equation down and created a new low in the calculated range and the close was near the new low value.
This also suggests a continued challenge of the lows with the new low being 3585.61. Prices in October will test/break this low.
The actual traded range for September was 535.15 points, if you allocate 30% to a zone for potential high. There could be a suggested high of ~3746 (30% of the range added to the close) with a suggested low of ~3211.05 (the remaining 70% removed from the close). This of course IF the range for October matches the range for September. An increase in the size of the range will naturally change the values. Sentiment/fear/panic/etc. will also change the allocation of the percentages to high/low as well as the depth of the range.
FDX (FedEx) as we saw has had a decline of 55% from the high in Jun 21 through Oct 22.
If FDX is a bellwether for the markets due to the corporation’s global reach and position, should SPX follow/match the percentage of decline as other companies (in the SPX) are impacted by the global economic issues. SPX could fall as low as 2168.
This is not a prediction of SPX falling to 2168. During the pandemic low, FDX fell 46% while SPX fell 35%, so expecting the full 55% is incorrect logic, yet a 46% decline for SPX would land around 2602.
Tighten your stops, don’t fight the trend, practice good risk management.
A consolidation range existed from Dec 2021 – May 2022 in which June closed below the support level and suggesting a potential move toward 3444.21. At the same time June closed below the 21 EMA, this set prices up for either the “Kiss of Death” or the “Breath of Life”.
July closed back above the 21 EMA completing step 2 of the 3-step process in determining direction.
At this time prices needed to close a month either above 4140.15 (for “Breath of Life”) or below 3636.87 (for “Kiss of Death”).
While August did show a rally above the 4140.15, we didn’t get the close we required to complete the “Breath of Life”. September however did close below 3636.87 completing the signal and suggesting that prices are going to push down further.
Other examples of the “Kiss of Death” include September 2008 and January 2001.
The close below the support has suggested the potential for a negative push toward 3202.35. Both price targets from June and September are open and viable price targets.
The 6-period stochastic (size of the consolidation range from Dec 21 – May 22) is now showing that prices are at the bottom of the 6 period range. The 4-period stochastic (size of the consolidation range from June – September) also is showing that prices are at the bottom of the 4 period range. This does not mean “over sold”, this demonstrates that prices have pushed the equation down and created a new low in the calculated range and the close was near the new low value.
This also suggests a continued challenge of the lows with the new low being 3585.61. Prices in October will test/break this low.
The actual traded range for September was 535.15 points, if you allocate 30% to a zone for potential high. There could be a suggested high of ~3746 (30% of the range added to the close) with a suggested low of ~3211.05 (the remaining 70% removed from the close). This of course IF the range for October matches the range for September. An increase in the size of the range will naturally change the values. Sentiment/fear/panic/etc. will also change the allocation of the percentages to high/low as well as the depth of the range.
FDX (FedEx) as we saw has had a decline of 55% from the high in Jun 21 through Oct 22.
If FDX is a bellwether for the markets due to the corporation’s global reach and position, should SPX follow/match the percentage of decline as other companies (in the SPX) are impacted by the global economic issues. SPX could fall as low as 2168.
This is not a prediction of SPX falling to 2168. During the pandemic low, FDX fell 46% while SPX fell 35%, so expecting the full 55% is incorrect logic, yet a 46% decline for SPX would land around 2602.
Tighten your stops, don’t fight the trend, practice good risk management.
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