Yesterday was a very good example of a situation where making a higher high isn’t bullish, particularly when it is a very marginal new high on strong negative divergence. That high made the second high of a small double top on SPX which then broke down with a target in the 1989/90 area. That’s a bit below the 1995 that I was looking for but there are good reasons to think that target will be made. SPX 60min chart:
What are those reasons for thinking 1989/90 should be made? Mainly it is that as well as the double top being a nicely formed pattern, the 50dema is at 1991 and the 50dma is at 1989. This is a very attractive target area. SPX daily chart:
Today and tomorrow are cycle trend days, which means that there are 70% odds that the day will be dominated by either bulls or bears. Bears have the edge on this opening setup and the day works best for them with an AM high that fails. The 50 hour MA closed at 1997 last night and a close below it today would look pretty bearish.
