Good evening, traders.
So a few important things have happened today.
We’ve had this sideways range, we poked it through the top, all of which I’ve said all along remains compatible with a sideways pattern of distribution—if that’s what this has been. The good news for bears is that we weren’t able to hang on to that 89-week SMA. We gapped to it this morning, which produced parallel rails this morning. And in the Discord, I suggested that I wanted to see an attempt of the bull flag to rally fail (you can see what I said about that here). That worked just as planned, so that’s good. Failed bull flag, failure to keep the 89-week SMA, back inside the range. So far that makes the breakout of the range a failed breakout. So all of that is good for the bears. And if we keep going, nothing is more bearish than a failed breakout, and we may end up going toward my target (which I’ve been pointing out, and which you can see in yesterday’s post here).
So, will we keep going? Maybe. I’ll dig in real quick with a count that might work here.
That all depends on the little bear flag failing and us getting some followthrough, which I can’t guarantee. I would like to be able to count the decline, from the high, as an impulse if possible, and if we don’t keep going, I will have to look for another way to do it, which I don’t have yet. This is what I have preliminarily.
But if the 89-week SMA stays as overhead resistance, I will take that as a good sign even if we don’t get immediate followthrough.
Another thing I like is the NDX. I like that it fell and could not find support on the August high which it recently breached:
It fell nicely out of the little rising wedge that I pointed out in yesterday’s article (here). So that’s lovely.
If that keeps going, here is what I would expect next:
So that’s my target on that.
We’ll see what happens. I think there’s a good chance we may get some continuation here. If not, I’ll have see what else I can come up with. But I like this so far. Bears have made some progress with the loss of the 89-week SMA on the S&P and the loss of the August high level on the NDX.
I hope everyone has a good evening.
2 thoughts on “Market Update for Tuesday, May 23rd, 2023”
I never looked at the 89-week SMA before following your work, but I was sure watching it today. Cheers!
We don’t get to see it very often lol. But, it’s certainly relevant here 🙂 Cheers