SPX went down a little further than was ideal, and then rallied very hard yesterday, so the topping pattern scenario is still on track.
The break below the daily middle band confirmed on Wednesday and SPX broke back hard over the middle band again yesterday. A close over 4115 again today will confirm the break back above. There is the option of a hard rejection back below that today, which would be unusual on a Friday, but definitely possible as today is the last day of April, and the stats for that lean 67% bearish.
SPX daily BBs chart:
An hourly RSI 14 buy signal fixed at the low and made the possible near miss target at the high yesterday. Ideally SPX would go a little higher today and that signal would make the full target while negative divergence forms on the 15min RSI 14.
SPX 60min chart:
Is the H&S option still on the table? Yes, though the neckline isn’t ideal and SPX has gone a little high on the right shoulder, but the option of heading 30 handles higher into the retest of the April high at 4169.48 looks more likely than it would have done if SPX had turned directly up from Tuesday’s low.
SPX 15min chart:
On Wednesday I was looking at the high quality bull flag megaphone forming on NDX and that is still looking good. We may well see NDX go on to retest the high at 13204.10.
NDX 15min chart:
On the NQ Jun chart that same bull flag has already broken up with a target at that high retest, and in the normal course of events I’d expect to see that retested today or Monday.
NQ Jun 60min chart:
In the short term I think the odds are 75%+ that SPX is topping out short term for at least a decent retracement, and I am looking for a topping pattern. That pattern may still be an H&S forming, and the next move would ideally be to rally a little higher, and then fail hard into the H&S target in the 3910 area. We’ll see if this plays out that way. There is an increased chance that we see a full retest of the 4169.48 high and, if seen, that would be an easier short as SPX could set up better negative divergence on the way there. Everyone have a great weekend. 🙂
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