26 May 2015 - Break Of The Wedge

The break of the wedge was to the downside, so the bears are a very happy bunch today.  I was expecting higher highs but I guess that's not to be so.  For now, we can consider the wedge pattern a completed 5 wave affair. 

With the breakdown today, prices have come under the intraday 200 and 75 MA.  This will be a bearish sign along with an ST turning down today as well.  The intra-day indicator is still in OS, therefore there are still risk of more downside.  But as we know too well, volatility can rear its ugly head and we should look out for a impulsive move upwards for those who want to protect their open profits. 

Next levels to watch for support in the SPX would be 2080 and 2040 (which is just above the 200 day MA).

MT: UP
ST: DOWN
PA: DOWN

As I write this analysis, the ES futures has already started its rally.  So depending on where the signals are, it could be that volatility has once again screwed with the position holders or that it is resetting for another hard push lower.  We will see tomorrow where signals lie.

 

Courtesy of ZeroHedge.com