The North Korean missile test pushed the S&P 500 futures lower but they have recovered most of the drop. My bias is still toward lower though the next FOMC meeting next week will act to keep the market constrained.
Same plan for today as was yesterday. A gap down in the S&P 500 would be the start of leaving an island behind in the mirror.
There is a reasonable chance that the S&P 500 gaps down today at the open and leaves an island formation, a bearish development that fits the near term bearish outlook.
The S&P 500 was just short of making a new high yesterday. We should probably expect a new high print in cash today since it is just a few points away.
The rise today is putting stress on the short term bearish case. If the market fails to turn lower early this week, we will see new highs before any possible deeper retrace.
S&P 500 futures are lower as I type thus the expected next wave lower in the correction may finally getting started.
I can’t say I’m excited about the upside in the S&P 500 from here but best to allow it to rise a bit higher this morning.
The S&P 500 stayed on plan yesterday, actually exceeding expectations. Today assuming that the equity indices consolidate ahead of the ECB tomorrow morning.
First, let us review the two primary paths for the S&P 500. Both are a variations of a corrective formation.
To my eye, grains are in an ending diagonal or wedge in the latter stages of its development.