SPX headed down, but will we get a bounce up first?

I remain bearish, as I have been, but I decided not to go swing short today. I had some early signals saying "go short" but was bothered by several other factors, some of which I will outline below. BTW, I am short in my "position" portfolio (3-8 weeks), just not yet in my swing portfolio.  However, as posted in earlier posts, I have done at least 2 swing shorts, exiting both profitably. And i still have the FAZ from around 18.60ish.

My work suggests that a bounce up might occur before SPX continues down. Today, the target was 1071, but of course as time passes, the target becomes lower, because we are in a down channel. So 1066-71 is possible, even 1088 (though I don't see it going that high).

The factors below contributed to my decision not to swing short today. There are other factors too, perhaps I will add those later in an update.

Could SPX go straight down from here? YES.  Might I have missed an opportunity to short? YES. But I know that other opportunities will present themselves. I decided to stick to my rule set and wait a bit longer.

2 charts below. Daily and 60 minute.

First, here is the daily chart.


Daily bullish signals:
* RSI held support line.
* MACD rising histogram despite the horrendous shooting star candle
* Stoch bullish cross
* Pushed above daily downtrend channel

Daily bearish signals:
* Today's shooting star candle is very bearish. Distribution.

Now, below is the 60 minute chart

60 minute chart - bullish signs

* Prices pierced and closed below the uptrend support line BUT backtest back up is possible

* Histogram falling but above 0....often means consolidation, chop, or moves up in price before down.

* There is still more room for upward price movement before it tests the upper R trendline

*Stoch newly crossing below 80 often is followed by temporary move up in prices

60 minute chart - bearish signs

* Prices pierced and closed below the uptrend support line

* Falling stochastic

* Falling RSI

* 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".