The S&P seems to be forming a rising wedge. It projects to the 1350s which coincides with the 1353.39 gap and a 61.8% Fibonacci expansion target from the 6/4 lows. These patterns can sometimes demonstrate a final spurt to the upside, which in this case would be ideal for meeting the upper trend line of the chart I showed yesterday on Twitter.
The big news for me is that David Rosenberg sounds like he's capitulating. It feels as though I just got finished with a post about him (this one) and he's flipping the switch. When the last hold outs jump on the trend, it's usually over. Let's see.
I think the S&P made its final high back in April. I think we're in the process of correcting it now. This would mean that we're headed much lower, but only after the market has done its job to the upside, and that is to get as many people bullish again as possible. We may be close, but I don't think we're there yet. It usually takes longer than you think to achieve lopsided sentiment levels.
As the S&P seems to be in a rising price channel, it would need to break below 1325 for me to get excited about the bears.
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