Don't be fooled by that break out last week. S&P 500 is still in its rising wedge to complete the counter wave B to the September drop wave A. I marked on the chart where FOMO/MOMO pushed it up through the upper trading channel that was set by the 2020 February peak and all the way to the trend line formed by the 2009 low and the 2018 and March 2020 peaks. However, the market bounced hard off those resistance lines and fell back into the rising wedge pattern. We seem to be in a small corrective wave (double top of sorts) off the the recent top. IMO we look like we may start the final leg of the correction. See my chart on Regular Flat Corrective Wave for more details on my hypothesis.
Hope this helps and good luck.
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Note that the red arrows on the right are possible options. It could stop at any of those places or keep moving down. I don't have any idea where it will stop.
Interesting. Well drawn. Interesting to see if it goes up or down on the pinch. Everyone is betting down... but a vaccine news could change the trend.
fortunawatches
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You are very good . I saw GANN principle for VIX just an other resign market is bearish
fortunawatches
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I agree 100% market will sell
DHLawrence
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Does a rising wedge continue after it is broken by a peak like today?
Wouldn't todays peak create a new wedge, with an overall higher & steeper resistance vector? The left end moves forward a bit to 2:25 on the 15th, and todays peak is the right end of the line.
If so... this stretches out that wedge toward the ATH - Oct 12 peak vector.... so then more bullish motion through Monday, then reversal...
Todays peak looked a bit like a piercing line of Doji on bigger scales... so that has me anticipating said drop as well... just curious on when we all expect it... this afternoon, or Monday morning.
Thanks! always appreciate your work!
Dr_Roboto
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@DHLawrence, well all the above ;) This market likes to buck all trends. However, eventually the price seems to break back down below the wedge. The FOMO/MOMO rally in September did this exact same thing, but on a larger scale. The dot com bubble is another example on an even large scale.
So far it is still holding.
planetshhh
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Hope you're right man, I opened up puts then we fell below VWAP and bounced RIGHT off 348. Probably should have waited, we could have a bullish close over 350 and we could retest ATHs Monday or Tuesday. But I also figured a Friday sell-off might be in the cards. We'll see!
Ruben_Ortegfx
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Keep posting those 'down visions' and it might eventually be happening ;) Personally i wouln't be suprised if we skip that dip and further up before a larger retrace comes in. Its a valid analysis though :)
Dr_Roboto
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@Ruben_Ortegfx, I don't know why I always seem so bearish. I did not start out that way back in March. This rally has defied all traditional logic IMO, and I know how bad reality is but the market does not care. I would not be surprised if it rallied more. I keep looking back over history to try and find a comparison but I can't. My TA approach seems to fit well across most of history as I keep trying to test it. This time it really does seem to be different. I wonder if this is what it was like during the dot com bubble.
FYI, it also quite common for bears to be ridiculed during bubbles and corrective waves.
jedington
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It's easier to be bullish when the market is bullish 80-90% of the time. I like seeing both sides/possibilities being measured either way, within reason.
ProfitHarvest
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Yep, rising wedge pushing up into very strong resistance. Megaphone pattern still somewhat valid here too...