SPY: Relief Rally or Broadening Triangle

Strong rally here but on much lower volume. Doesn't look like there was much share absorption to signify a real bottom for a strong reversal nor was there true capitulation by any metric. I think this is another broadening triangle (as we saw earlier) and throwing on some (short) hedges (on existing long positions) is prudent. I would look to close the hedges at 420 and am targeting below a 380 move where 380 would be the bottom of the broadening channel plus the breakout. I would fade the position if it bounces the bottom channel.

Comment:

While it didn't exactly have the bounce I was looking for (bouncing off and heading down), the pattern still controls the price action meaning this trade is still in play. Will add some more to the hedges.

Trade closed: target reached:

Good place to take some profits on hedges, will re-enter the hedges as we re-approach 385. The move down was too accelerated and the volume shows that dip buyers came out of the shadows. With the Fed coming out later today and market priced for 3 hikes - I think they come in more dovish than expected throwing some fire into risk markets (and commodities).