It’s GroundHog Day, and we remain glued in our range. Structurally, we remain unchanged from last week.
We have this rising wedge into moving average and trend line resistance. We had a false breakdown of the wedge, and we’re stuck, waiting to see what happens next:
We’ve recaptured the green trend line, and we’ve consolidated above it. I don’t place too much weight on that per se, as we consolidated above it in mid-April but then lost it. This remains one of the longest sideways consolidations we’ve had in some time.
In addition to those structures, we also may discern this additional structure:
And the Russell, as pointed out this weekend, is involved in this bullish wedge:
We had that breakout at the end of last week, and over the course of last night and today, it’s come back to retest it. And if you’re a bull, this is something you’ll want to take at face value.
I’m not quite in a position to do that yet, personally. As I also discussed this weekend, I’m not yet sure that I trust this structure. And, one thing the bears have going for them makes its appearance on the cash session.
So, potential remains lined up on these two indices. But, as my refrain has been all along, we’ve tested that 89-week SMA on the SPX, we got a reaction to it, and until we move materially lower, I still can’t rule out another attempt being made on it. We had multiple sharp rallies at the November & December highs, and it’s always possible we see something like that again here.
As far as a count for SPX goes, this weekend I had really good wave balance that could justify the count I like, but as is so often the case, without a range-breaking move, things aren’t perfectly clear. A couple things I may be able to do are these.
In the end, we’re in a terrible consolidation. They keep gluing us back to the same levels again and again. I personally suspect it is a distribution. And it’s only done when they’re done.
I do have a comment to make on Bitcoin. This weekend, I discussed the long-term trend line that I think matters a lot here. In this weekend’s post, I discussed how someone keeps selling it every time we try to get to or through it. And that’s exactly what happened again over the weekend. From the time of that article, it’s fallen over 7%:
And structurally,
So that looks good for the bears.
In sum, I hope we don’t stay stuck. I continue to think the bears have a great chance of taking over at any moment. I don’t know if we’re waiting for the rest of earnings season to conclude, or if we’re waiting on the CPI this week. But, hopefully we’re either done or very close to it.
I hope everyone has a fine evening.
