Nothing has changed from a System perspective. The System is still long and slightly bullish with the Score expected to be neutral-to-bearish at 4hr support by 3-4PM. The stop has been raised to 1601.88 for a likely 7th profitable trade in a row. The System would likely go short at that level depending on the status of indicators at that time.
The strength of the rally is certainly disconcerting for the idea of an upcoming lower low, but bulls are not out of the woods yet. A month ago, technical indicators suggested 80%+ odds that a large downleg was coming over 4 weeks (and up to 9 weeks) and 1530-1550 was the likeliest target. Almost all of those indicators including the time factor have been relieved or fulfilled and perhaps 1560 was enough. Certainly, I wouldn't give 80%+ odds anymore to another retest of the bottom +/- 1%, but I still give it a better than 50/50 chance for the time being based on technicals. The Score is on the verge of turning neutral-to-bearish. It is pretty common to backtest breakdown levels (which we had around 1618) and then fall again. A lot of sentiment indicators did not turn as bearish as normal suggesting buy-the-dip and Fed-backstop mentality is well-entrenched now with little wall-of-worry. And, the Fed change has not likely been digested in 1 week. But, we cannot ignore technicals, so if 4hr support rises above the 20dSMA and SPX closes above the 20dSMA, it will be very difficult to recapture the bearish momentum and a new high becomes likely. Good fortune.
P.S. One thing that favors bulls today is that daily TRIN is slightly spiking despite the SPX rally. Looking back, that is normally a bullish indicator assuming it sticks into the close and it happened several times in the non-stop January rally. On the other hand, daily TICK is making a zigzag/lightningbolt formation which I found usually leads to 1-2 days of sideways-to-down SPX action. If TICK and TRIN stay that way at the close (that's a big IF), that probably favors sideways action (+/-1%) for 1-2 days with a bullish outcome. So, bears either need to form a price reversal today getting SPX back near the flat line or hope that TRIN does not stay high. VIX is also hovering around its 20dSMA which kinda paints the same picture. And, SPX is bouncing under its 20dSMA. Key short-term moment for the market.
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