Where is SPX headed on Tuesday?

The SPX can go either way on Tuesday. We should have a clearer picture on Tuesday. Below are both the bearish and bullish scenarios.

Volume: Note that it took 3 days on LOW volume to undo one single day of HIGH downside volume. In fact, the volume on the big red candle (from this Tues) was larger than any day in July or Aug, during the uptrend.

Mostly I am bearish next week. My only concern about stamping "bear" more definitively is that the SPX actually IS perched above the downtrend line connecting the highs, and it right now it is consolidating ABOVE that line, which is bullish. We retraced about 50%, and 1021 would be a 62% retracement. My previous chart posted yesterday suggested 1013/17 move today, which is close to what we got. And the 1016 is right at a prior "breakout" point.

See the chart below, where:

(1) I also noticed, however, that the last time SPX hit above the trend line by a few points, the SPX actually declined (on 9/1). Notice how the original yellow line was broken higher and followed by a decline (although on 9/1 the decline happened the same day). Will the newly drawn green trend line have a similar fate as the yellow and decline?? Or, will the SPX go higher, requiring yet a third new trendline? If a third trendline is drawn, and the SPX breaks over THAT one, then that would argue that the downside ended at 992, for now.

(2) The solid blue lines are the fib fans for the move UP starting 08/18. Notice that the SPX moved up, but broke BELOW all three fib lines. The break under the 3rd fib is generally considered the end of the uptrend. Notice also how that third Fib line is now acting as RESISTANCE. So this means that the move from 978 to 1039 ended at the 1039, UNLESS the SPX can break above the lowest FIB fan line. It can go either way. We will need to wait and see.

(3) The red fib retracements on the right side of the chart are for the DOWNMOVE from 1039 to 992 (bearish scenario), NOT for the upmove 978--1039. The BULLISH scenario would say that the move from 1039 to 992 represents a 78% retracement of the move up (those fibs are not on the chart to avoid clutter), and that the retracement ended at 992, and the SPX is now on the way to HIGHER HIGHS. This could be the way it works out. We really will know more on Tuesday.

Chart below is 60min spx.

* ChristopherStockGuy is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. For details, see the post from SATURDAY, AUGUST 15, 2009 titled "Disclaimer".