I was hoping that SPX would go higher and test a possible resistance trendline in the 4300 area and that is still possible, but reviewing the charts over the weekend there is a strong possibility that SPX is about to break down.
So far the high is a near perfect backtest of the monthly middle band, which is not the most obvious resistance level, but is a very significant one nonetheless, as it is regularly tested fairly exactly as support in uptrends.
SPX monthly chart:
Looking at the short term on ES the overnight high was just below the new weekly pivot at 4116.25, and the patter from the low on Friday morning looks like a rising wedge that may be a bear flag. A sustained break over weekly pivot would make this look a lot more bullish.
Adding a note just after the RTH open, ES has just perfectly tested resistance on this rising wedge, confirming the resistance trendline with a third touch. This wedge could still break up, but 70% of the time these break down of course.
ES Mar 15min chart:
There are some international numbers being reported today that should shed more light on global inflation levels. My suspicion looking at a lot of charts over the weekend is that either those will disappoint, or that the markets will respond negatively to them not disappointing.
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