Brief S&P 500 Recap

Consistent with the classical chart pattern I noted this morning, we saw a significant rally. Where we now stand within that structure and within some other technicals is that about which I will briefly discuss here.

  1. We are perched at the neckline of the inverse now. Support here should propel us toward the inverse target (noted on chart).
  2. We retested the COVID channel (from beneath) today, and it’s the second time we’ve done that. The third time (if we rally tonight) should get through it, as each attempt typically weakens the resistance.
  3. The 50-61.8% retracement of the decline from 4/21 is above us (the orange box), and that’s the level many people will try to short. I actually believe it will only add to the short squeeze we may be facing here.
  4. The upper green trend line comes from the triangle noted here and may also be a target if we surpass the inverse target.
  5. The AAII survey came in today and the “bullish percent” was as low as the other two I recently discussed (see the section I wrote regarding sentiment in this article). That now makes 3 of the worst 24 readings in its entire history having taken place in just the last 3 weeks. Furthermore, the “bearish percent” was at a 52-week high.
  6. The meh earnings and meh GDP print are exactly what we need here in order to rally, as contradictory as that sounds (the bad news has already been priced in; now the market will be pricing in improving GDP that we’ll read about later). We should rally on unenthusiastic news. We will want to see people stay bearish all the way up. They will rage short it all the way to new highs.

ES


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4 thoughts on “Brief S&P 500 Recap”

  1. Wow! Follow you for a reason bc my gut says we HAVE to go lower. Was thinking a test of lows , if not, test to 4000. Especially after earnings. So im not surprised the charts say differently. Appreciate the update and splash of cold water !

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