As I was suggesting in my morning post yesterday SPX tested the daily middle band and found support there. As long that support holds (daily close basis) then I’m still looking for a touch of rising wedge resistance on the chart below and that is currently in the 2130 area. SPX daily chart:
The short term pattern setup here is pretty clear. The falling megaphone from the 2117 rally high was tested yesterday afternoon and SPX gapped over it this morning. On the bull scenario SPX pushes up hard here, and pushes through in the next couple of days to that 2130 target. On the bear scenario the high on this rally would be capped in the 2105 area and then at some point in the next 24 hours or so SPX would return to the H&S neckline and break it, on the way to the H&S target in the 2055 area. SPX 5min chart:
My lean is the bull scenario as that is the better technical scenario, though of course it would also be a lot more fun as that 2130 hit would be a great short entry. As long as the bulls can hold the daily middle band they have the advantage. If we see a break back over the 50 hour MA at 2108.5 (hourly close basis) then I’d be looking for that 2130 test.