This rally that, IMHO, should have already been over by now, is hanging on by its teeth, but it is hanging on. This move will have to last a few more days before there’s a chance of a IBD type follow through day because it will take several more days to pull in retail longs off the sidelines. My biggest and continuing concern is that we have not had a capitulation day and I just don’t see that can be avoided. But we’ll see. Maybe tomorrow the whole thing will drop into the abyss.
Chart of SPX showing that the yellow 5EMA has yet to push up through the red 10EMA and so this means that going long here is very risky. It’s going to take 2-3 days of consistent upward moves to pull the 5EMA up above the 10EMA in the first part of a fresh ‘buy’ signal per this method. At the moment, it could go either way. It just depends on whether or not AAPL has bottomed for now.
That rising trend I’m showing on the chart is legitimate as I have three touch points, but it’s very weak and vulnerable. It’s going to have to hold for the next few days, or the whole thing could just dump. While it would be nice to see $SPX rise above 1434.27, it’s more important for now that it not close below 1412.20. The longer we can hold above that level on a closing basis the more the odds increase for a move up. If the market is consolidating and building strength for a leg up, then my target area of 1440-1447 may not stop the move. But first we need to get away from this base or we risk rolling right over.
We are not out of the woods so be careful.
My stops are in.