Wednesday, January 6, 2021

SPX Update: Head-fake, then Whipsaw...

Last update noted:  "bears have one last shot here, at an ending diagonal, which would head-fake over blue (chart above) then whipsaw"

And that's exactly what the market did on Monday.  Thing is, because of where it found support and the potential of a micro c-wave, Monday/Tuesday's action hasn't resolved any of the big picture questions yet.  Discussed further on the chart below (note: typo:  Should read "below 3660," not "below 3260"!  Thanks to Will in the forum for pointing it out!)

Intermediate term, we've been talking about this resistance trend line forever, it seems, and SPX still hasn't managed to sustain a breakout yet:

In conclusion, bulls aren't out of the running yet, but they do still need to sustain a break of IT resistance.  Bears need to first break 3662, then ~3640, but if they can, then they likely get to at least the zone near the pink trend line, if not below.  Trade safe.

Incidentally, I penned a short, slightly cryptic piece earlier, linked here.

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