Friday, February 8, 2019

SPX Update: Channel Break

The last couple updates noted that we appeared to be approaching an inflection zone.  On Friday, I had noted that another wave up might be needed, and we did get a new high after that update -- and that may finally mark a complete wave off the December lows.

Bears, of course, want to hold the breakdown of the black channel against retests; bulls tested the channel at the close yesterday, and so far that test has been rejected.  Sometimes the market likes to create a second test of such channels, but I'm not sure if it will do so here or not.

(Please note typo:  Fib area should be 2589-2604)

In conclusion, presuming bears can make this breakdown stick, SPX may take aim at the 38% Fib retracement.  If it does, we'll see how it looks from there and decide in real-time if it looks pointed lower (toward the 50% or 62%).  Obviously, if it sustains a breakout over this month's high, then all bear bets are off.  Trade safe.

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