23 May 2013

As confident I am about this recent move down, I would still stay cautious and we should always practice being cautious even if we have an extensive move down, as the next few month should bring about volatility.  There will be swings we will not be fast enough to trade, therefore the trend is very important.

The ES seems to be putting up a wedging pattern and it would suggest lower lows.  The rally we were looking for today happened after a substantial drop which only brought its head above water if ever. We should move lower tomorrow but there is a possibility that we would extend up first before that lower move.  It wont make a difference as the end of the week should end with a beautiful reversal candle and a red one at that. Every chart I look at seems to be buckling to the intense weight of its rise recently and I would not be surprised if we accelerate lower soon.

The SPX seems to be putting a wedging pattern as well and the continued direction agrees with our trend indicator in short and mid term time frames.

Mid-Term: DOWN (Unconfirmed)
Short-Term: DOWN