Today’s post is late and brief as I’ve been out most of the day so far. A one day thing.
Yesterday’s tape was a mess. A bullish breakout that failed, then a bearish breakout that failed, leaving a brutal bull trap at the close in the form of a 70% bullish falling wedge, a possible double bottom setup and a supportive 5min buy signal.
Sometimes these are topping patterns though and that was the case here. The wedge has broken down with a target in the 1908 area, and I’m expecting to see a 1903 retest today unless ……. this is a triangle, in which case I’d be looking for support in the 1916 area, not quite hit at the current low today. SPX 5min chart:
We should see a retest of the 1903 low today and really we should see a trend down day today, though there’s little sign of that so far. The upside marker for resistance that should not be broken today is 1940-2, and if that’s broken then we may be seeing a continuation of yesterday’s crazy tape. As long as that holds I’m leaning short here into a 1903 retest with possible (but unlikely IMO) triangle support in the 1916 area. Stan’s update this morning is here.