Yesterday I wrote how the WLSH5000 hit exactly my ideal target zone and why I expected a little more upside. I also warned that there were conflicting signals (low volume, overhead resistance) and us such suggested “For now I see the upside potential lessening by the day, with downside risk increasing.” All this happened exactly as suggested, which is a nice confidence booster 🙂 But, before we get too confident and the market humbles us again, let’s see what the S&P 500 tells us. As you can see, I like to mix things up by tracking all major indices, not just one. Tracking all gives a much better idea of what’s next. Tracking one will blind-side you.
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That said, the S&P500 hit also about the 62% retrace of the 2019-1821 move, and reversed intra-day. Such reversals are bearish when they are followed up by another red day. Otherwise, intra-day reversals are not necessarily bearish by them selves. The market may simple had to burn off OB conditions before being able to move higher. Thus, a break below 1920 (the 50% retrace level) will confirm intermediate (a). I expect intermediate (b) to hit the 38.2% retrace level, which is at 1896. From there intermediate (c) can extend to the 76.4% retrace with a (c) = 0.62x (a) type relationship. Alternatively, one could argue Major b peaked, but I find that time-wise (5 days) much too short.