The thing that I find interesting, is the current rally from the low yesterday looks to be in 5 waves. My understanding is that up trends only happen in 5's when we are in a motive wave and not a corrective (5 up and 3 down). Corrective waves have up trends in 3 waves and down trends in 5 waves.
I checked against the rally after the "trade war" drop and we just passed its corrective wave time frame (0.25*motive wave length).
The clear breaking of the down trading channel is also normal sign of trend change. It is highly possible that the corrective wave has completed and we are in the first minor motive wave for the next major motive wave. Or, this is one major fake out. Technically, we did not make a higher high than the previous waves. It is very possible that we still have a lot of down left to go.
I just have a hard time believing we are in rally mode for next corrective wave given the massive surge in coronavirus cases. I guess that speaks to the power of the Feb pump.
We will know if it is a motive wave because there will be a small corrective wave (#2) over the next day or so to test support. Then the next motive wave #3 should be strong and clearly break the resistance setup by the wave #1 peak.
The one thing to watch out for is that large time scale corrective wave only have 3 waves. That means if this is still correcitve the wave (some for of B wave) then it will stop at 1.618 and not complete to 2.0 extension. There are many examples of the S&P 500 doing this 3 wave up to 1.618 extension. That 1.618 wave is typically followed by a rapid drop wave C.
The only thing I do know is that this is the time for me to just wait for things to shake out. I am too much of a bear and too conservative with my trades to play this hand. I am more than happy to wait until the trend is clear. I burned myself today being too arrogant and aggressive.
I hope you can find the SPX500USD easier to track data and complete trend/wave analysis. You have great thoughts.
At this point, I am done trading until things clear up more. The Fed pump is amazing what it can do. I still question how long they can keep it up. Seems like a house of cards that will have to fall some time (months, weeks, years).