Despite all the bullish sentiment surrounding the major indexes, we are now under a trifecta of resistance at this key level.
We have now been rejected from an area that is:
1.) The downtrend line from the late September stock market crash.
2.) The $282 level resistance area from the October to November correction.
3.) The 2018 rally trendline, which we fell below.
This area also is magically the 76.8% retracement level from the September - October sell off as well.
When testing this trendline today we saw an immediate sell off. While there is renewed bullish sentiment that we are going to break the all time highs now and go on to make new highs, the reality is that we likely have one more reversal day left to turn bullish sentiment to bearish sentiment at or near today's highs, right on the confluence / trifecta of points above.
Once a red candle has been print we'll have a nice M shaped top, and look out below.
We have now been rejected from an area that is:
1.) The downtrend line from the late September stock market crash.
2.) The $282 level resistance area from the October to November correction.
3.) The 2018 rally trendline, which we fell below.
This area also is magically the 76.8% retracement level from the September - October sell off as well.
When testing this trendline today we saw an immediate sell off. While there is renewed bullish sentiment that we are going to break the all time highs now and go on to make new highs, the reality is that we likely have one more reversal day left to turn bullish sentiment to bearish sentiment at or near today's highs, right on the confluence / trifecta of points above.
Once a red candle has been print we'll have a nice M shaped top, and look out below.
Comment:
Despite the overly enthusiastic bullish sentiment that "this was the moment" we were going to break the resistance, it turns out that the prediction is playing out exactly as intended, and we are heading lower. The $281 support is broken likely setting up for a test of $279. Next key levels would be $275, $271, $268, $264, and $260.
Comment:
While the S&P is still having trouble advancing here, I believe we now have one more impulsive wave higher to make, then we will have our day of reckoning with shorts.