$SPX Update

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Ok, so the diamond from yesterday worked well enough. The little break down into yesterday’s close did turn out to be a bear trap, and we had a decent rally today.

Now, if we’ve completed a big “flat” correction for orange “B”—which is the crux of the bullish thesis—we should keep going up. If we’ve in turn completed a 1 and 2 in blue, 3 should be up somewhere closer to the 200-day moving average, I would expect. Up there with it is the 50-61.8% retracement area of the entire decline (that’s the orange box). If we do go up there, I would expect to see some resistance in there, and some consolidation. We may even close (if even partially) the post FOMC gap. I don’t know if today was a little orange 1 & 2. We may still be in the little orange 1, and it’s also possible that the little orange 2 isn’t done yet. But, if Thursday’s low was the big orange B, that low should hold.


Not much else I can say for the moment. Let’s see if we keep going up. Until we do, there’s still risk of more decline, but at least initially, the diamond breakout looks good to me.

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