Finding myself with a little time to look at the market today, it is almost comical how well this robot is following instructions. Since it broke above resistance in the summer and turned it to support with a couple of hard tests (whipsaws) SPX has been programmed for a second hit of point #5 of the reverse symmetrical triangle. That is a bull turnstile or bear reversal point… with FOMC coming out tomorrow at a 97% probability of a rate cut according to da boyz at da CME.
Reverse symmetrical triangles are generally thought to operate opposite bullish symmetrical triangles (duh) and act as reversals. But… open minds work best in a market over-driven with central bank stimulus with algos flying all around through the interpipes. Will the market care about an old notion like a TA reversal pattern? We’ll find out soon.
Will SPX sell the news? That news sure does seem baked in. But in this market, with the Fed not only cutting rates but also scheming up QE with SPX at record highs we are in uncharted – and potentially inflationary – territory. The weekly chart below is turning its momentum indicators upward again and well, you just never know… at least I don’t. My plan had been for a drop in assets leading to full on inflationary operations into H1 2020. But for now, this mess clings to its bull status.
We have been dead on about one thing… the drive to 5 is alive and in essence, in the books (again) now.
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