Potential Inverted Hammer today on the $SPX. For the moment, this is just a candle with a long upper wick and means little without a confirming move tomorrow. It is possible that a new ‘buy’ signal could be generated tomorrow with a close above today’s high of 1225.60.
I’ve drawn a falling price channel on the chart below which could also be a Bull Flag pattern. A close above 1225.60 wouldn’t break $SPX out of the potential Bull Flag, but would get it close. And I’ve noted on the chart that the last time $SPX broke out of a similar channel, it failed to take out the previous high of 1277. If $SPX should break out of this falling price channel, then it will need to get back to 1267 pronto, and if it can do that then maybe it can finally get back to 1277.
One thing to keep in mind is that when $SPX bottomed in early October at around 1075, it ran all the way up to 1292 in 18 sessions. It has now been 33 sessions since the swing high of 1292.66 and even with all this time $SPX has failed to put in a new high. Clearly the market has run out of steam and I have no idea what it’s going to take to pull money in off the sidelines to fuel the next rally leg up.
They sold the Q’s today at the close, which is never a good thing for this important ETF, and the $TRIN closed at 1.02, which seems like nothing at all, but in this dangerous market environment you just have to watch and be concerned about everything.
Be careful. Stay on your toes.