I’m thinking that today should be a “doji day” like May 5th or 19th where the market makes a doji candlestick on the daily chart. SPY’s slow stochastic is overbought on the 60-minute chart and it will be hard for the market to hold onto gains made today.

This picture shows a TradeStation RadarScreen that is set up for George Method. For any of the symbols in the list, it will generate alerts whenever the MACD crosses zero, when the slow stochastic lines cross, or when the 9ma crosses the 36ma (click to enlarge):

The interval column makes the indicator columns calculate for the 15-minute time frame. After adding the columns, turn on the alerts for the three blue indicator columns, and set the moving averages to 9 and 36.

Over the weekend, the futures spent a good deal of time in the 877 area without being able to sustain a bounce from there. I regard that as bearish, and it looks like the support at that level is being eroded.

George has found a free site for sharing charts: Freestockcharts.com. The site runs on SilverLight, which is Microsoft’s Flash competitor, so you will probably need to install the plugin.

If the SPX can hold above the 875-880 area, it may be able to consolidate the rally gains in a rectangle pattern trading between 880-930 for a while.

However, if the market dives through the 875-880 level on heavy volume, then a double-top pattern comes into play. Subtracting the 930 peak from the 880ish neckline, we get 50 points. So, the target would be 880-50=830.

Perhaps the market won’t do anything so drastic the day before a holiday. But don’t forget that the February dive began on the Tuesday after a three-day weekend with a giant gap down on February 17th.

If the market closes weak like it did on February 13th, then a scary gap down becomes a possibility for Tuesday morning.