Market Update for Thursday, May 18th, 2023

Good afternoon, traders. Or should it be, good aftermoon?

So, we’ve got this long, sideways trading range, and SPX poked out the top today:

And, not only that, we even poked through the all-important 89-week SMA. If this is all a pattern of distribution, none of this is out of the ordinary. It would become suspicious if we kept going up, then retested the 89-week SMA from above, and then rallied from that point. That would be extremely bullish and would call the bear market into serious question.

But, poking out of the top of a long, sideways distribution is still normal behavior. In Wyckoff terms, these are called “springs,” and they are designed to flush all the shorts above the prior highs. And that’s just what we’ve done today, taking out both the high from May 1st, and even the high from February as well.

If we get a reversal here,

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So, we’ll see what happens. I will look for some available fibs. This may just be a final short squeeze. I hope everyone has a fine evening.

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