SPX retraced a bit yesterday, rather more so than the daily candle suggested, as the retrace of the channel from Friday’s low to yesterday’s high was close to the 23.6% minimum in a strong trend. I’m expecting more, but it may go the other way.
If we are going to see more retracement then I’m looking for a double top or H&S to form here to take SPX down towards the obvious targets at rising support from the 1871 low and a retest of the daily middle band, now at 1948. SPX 15min chart:
Here’s the daily……..
Looking at the first hour of trading today the obvious reversal pattern option here would now be an H&S rather than a double top, and there are two other things to consider here. The first is that 60min sell signals are now brewing, and if they fix then they most likely won’t have made target by the time that the daily middle band was retested.
The second is that the high so far today is 1999.31, so that was a test of the second possible rally target area that I listed on Monday morning on the daily chart above. If we see a hard reversal here then this could be the rally high. If so SPX would break back below the daily middle band and convert it to resistance.
