So Friday’s post was on the mark. Great, the bounce is here.
But what are we left with? Why, a Symmetrical Triangle that is forming on the S&P 500. These are normally thought to be continuation patterns, which would break the market higher. But in reality, they end up going the other way a good amount of the time as well.
The market is losing momo, participation and its 50 day moving averages are rolling over. Much like with crude oil, which we had noted several weeks ago in NFTRH was being pinched between the MA 50 and MA 200, SPX is going to choose a direction soon. And the force behind the direction it chooses is probably not going to be mild.
Therefore it is wise to not over commit (i.e. have balance) until a direction is chosen. From there a trend should develop.
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