I’ll be away from my desk today and possibly until tomorrow so there won’t be any new trade ideas, updates or market commentary posted today. As far as the broad markets go, the $SPX is now trading around the 61.8% Fibonacci retracement level of the move down from the Jan 15th (all-time) high to the Feb 5th reaction low. The 61.8% retracement level is a common ending point for counter-trend bounces, assuming that is what this is (still my primary scenario). Of course many counter-trend bounces exceed the 61.8% retracement level so it’s not a hard line in the sand.
Not too far above current levels is also one of the alternative scenarios which I recently shared and that would be a backtest of the uptrend line/bottom of the rising wedge pattern on my daily SPY & $SPX charts. A backtest of that trendline over the next few trading sessions, assuming the market continues to move higher from here, would also coincide with the key horizontal resistance level that was highlighted on the SPY daily chart posted on Jan 30th. That horizontal resistance come in around 181.60-181.85 on the SPY and 1812-1815 on the $SPX. Any solid close above that level will call the bearish scenario into question and open the door for a move to new highs. Sorry but no time to post charts today, possibly later tonight if I get the chance. -RP