Is this just a little top of the rally since 12/02? in which case the bottom of the rising wedge will likely be the low target or will this become a larger and larger top as more and more support breaks?
Don't guess, just let it tell you. First stop is the bottom of the wedge in todays chart. That rests slightly above 1300 at the moment but rises daily. Then all 3 major moving averages are sitting within 50 points of the bottom of the wedge.
The market is set up in a way right now that a fast 100 point sell off would slam the market below all support. But, lets see support lost first.
This is now a good spot to be short with the recent highs as stop loss and watch the support levels.
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Key Levels
Upside -- 1353, 1370
Downside -- Here, 1337, 1300, 1288, 1257, 1249
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SPX Daily
Theres the wedge and our little rollover is sitting on very first support at the mid-bollingers and previous resistance at the shoulders of last years big H&S pattern.
If the move since last October is an ABC move, then we could be done. If its a 5 wave move, we are probably starting wave 4 down to the bottom of the wedge and then one more rally north to complete the count.
There's really no way to know which it is other than watching the support and how the market trades. If we are indeed done with this entire move, we will spend some time putting in a larger top and then the selling will hit super fast and furious.
The market has created a large amount of optimism and hype here, so if it is going to be a major top, it's going to take some time to build a larger top.
GL
CJ
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