Bravo bulls, bravo.
Not only did you obliterate the prior all-time high in the S&P 500, but you’ve also set us on the final path higher toward /es 3000 (more on that in a moment).
But let’s not buy and hold just yet. The bulls actions have consequences, and those must be dealt with first.
Consequence #1 – AB=CD
We’ve completed an equal move from the /es (continuous) Brexit low, to the August 23rd prior high, and down to the post-election low (November 9th), with Wednesday’s blast through 2238.50.
Consequence #2 – Voodoo/Fibonacci Grid confluence
In the /es, the 2108.25 level served as the second fire line target off the 2009 low. Notice how price action traded around it before AND after crossing above it.
Wednesday’s price action shot higher through 2238.25, which is termed a snow line (basically a third level of importance, beneath the fire and tree lines).
You can google voodoo lines for more information about the fibonacci rules behind them, but here again we saw sellers at a key technical level.
Consequence #3 – Volatility extreme on a longer term time frame
Wednesday’s /es high touched the upper +2 standard deviation of a 200-day EMA Bollinger Band.
So when should we expect the LONG AWAITED sell-off to begin? Let’s turn to fibonacci once again.
Again we use the Brexit Low to August High to post-election low. This gives us an approximate time of January 4th for the bullish momentum to subside.
That would indicate a choppy trade until the new year. And it may take that long for the post-Trump sugar high to wear off.
Trade well Slopers.