One More $SPX Thought

Now that I’ve had a little more time to consider things, I want to point this possibility out.

I’m glad we sold hard, as that’s how an ending diagonal should end. They tend to retrace deeply and suddenly and we’ve done that. That helps the bears immensely. That said, as noted earlier, I don’t see a good “2” (here). That makes me a little suspicious. And we then sold off too deeply for us to be in an expanding flat (also discussed earlier).

That lead me to this possibility:


Now what I was trying to do was line up Green 2 with Powell’s speech on 11/30 and Orange 2 with the next FOMC meeting. But by doing this larger leading diagonal for Green 1, that puts blue 5 of Green 1 at Powell’s 11/30 speech, and if everyone’s good and bearish there, it’ll make a good trap down there.

Note how symmetrical this can become. We had a triangle-like structure at blue 4 before the last rally into the high, and we can have a similar contracting structure here in this bullish wedge that can form. This can make a smaller head and shoulders within the head of the larger head and shoulders. We just need to be cautious about that Green 2 coming at some point.

So, let’s see if we rally tomorrow for blue 2 of Green 1. We’re oversold enough in the short-term that that would make sense.

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