Important Retrace Here

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SPX broke up nicely yesterday and the obvious next target is the daily middle band, now at 1991. At that test the bulls should have a chance to take control back and test the all time highs. SPX daily chart:

150317 SPX Daily Rising Wedge

On the 15min chart I have a clear resistance trendline for the current move and I’m looking for a retracement today to establish the support trendline. I’m looking for support areas at broken double bottom resistance in the 2066.5 area and the 50 hour MA in the 2064 area. If reached I’d be looking for one of those to hold. SPX 15min chart:

150317 SPX 15min Double Bottom Setup

If they don’t hold then there is a bear scenario to be aware of here, and that is the possibility that SPX is forming a right angled and ascending broadening formation. If so the next target would be a retest of the lows and these patterns break down 66% of the time. SPX 5min chart:

150317 SPX 5min Poss Broadening Formation

My strong lean here is towards the short term bull scenario and a retest of the daily middle band this week. This bounce could easily fail there though and I’m hoping that the retrace low today will help assess how likely such a failure would be.

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