$SPY, $QQQ and $IWM Are Building Bullish Short-Term Structures

I pointed out some of these this morning here and here, but to reiterate and add $QQQ, I want to note that bullish structures are forming on the indexes:

1. A bull flag (parallel rails) with “equal legs” between the two moves down from yesterday’s high on $SPY,

SPY

2. A bull wedge (contracting rails) on $IWM,

IWM

3. And a symmetrical triangle on $QQQ.

QQQ

Though the last one is a bit more directionally agnostic, the indexes have the potential to rally together here. Based on the various counts I can supply for these instruments, we may expect the recent highs on all of them to be taken out over the next few days.

Yesterday afternoon, I pointed out that $ES was poised to reach fresh lower lows (I was looking for a move closer to the orange box in the image below), which we got, and so that may be about all we get for the time being. I would rather have seen it go lower, but perhaps the minimum conditions I set out in that post have been met (I wanted to see some more complication arrive after yesterday’s rally, which we now have in a full 3-swing move).

ES

The potential is still there to go lower, but I think the price action today is reducing the probabilities of that happening.

[UPDATE]: Though I am expecting higher prices from here including eventually taking out all prior highs, since these structures all failed on the time frames I was discussing them, I will file this call under “Unsuccessful Calls.”

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