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Good afternoon traders.
The S&P 500 is making another attempt to break out of this bull flag:
I continue to have no confidence that it will be successful. If we are in a pattern of distribution, these should continue to be sold into.
Yesterday, I was a little suspicious of an attempt to count the structure as a nest, as that can be wishful thinking, and as of today, that’s now been eliminated. It is preferable to count the structure as a single wave, which we can now do as follows:
In addition to that, the points I made yesterday regarding Apple and Microsoft remain intact, as we continue to threaten those trend lines.
And finally, the VIX is doing some things I very much like to see.
Other technicals I like to see here include:
- A nice, sharp divergence on the daily RSI,
- Similar divergence on the daily MACD, and
- We have a bearish MACD cross as well, between the fast and slow lines (red arrow).
So, all of these things look very promising to me.
We’ll see what the CPI brings us. I hope everyone has a lovely evening, and hopefully we get going somewhere soon. I continue to believe things can turn very ugly quickly.