S&P500 Index 4H Chart 10/2/2012 8:35AM EDT
Support pivot: The S&P 500 has been trading in a declining channel seen in the 4H chart for the last couple of weeks. It slid below the channel support as it accelerated toward the 1424 level, in the 1420-1425 area noted in the previous update. The market has since bounced off this level, but not before establishing some bearish momentum in the 4H chart with the RSI reading tagging 30.
Momentum; channel resistance: In fact, it can be said that the momentum in the 4H chart is still bearish until the RSI pushes above 60. Price should also clear and stay above 1450, which would also clear above the declining channel resistance it is testing during the 10/2/2012 trading session.
The channel can also be assessed as a flag pattern, a break above which refocuses the S&P 500 index to the 1474.25 high.