500 index breakout was most likely not a one day wonder! Quality support for now looks to have held and the potential “inverse head & shoulders” patterns highlighted, in these groundhog charts last week, looks more likely. The instructions in the groundhog post was to….lower stops on inverse positions due to support! The patterns and support holding increases the odds the bounce has more to go.
Sunday night I shared that a rally in stocks and a decline in bonds was about to take place.
Game Plan….For those that bought at support, use support as your protective line in the sand. Stiff resistance comes into play around 1,130. Will see how things look if resistance is hit…so far harvesting at resistance, aka, trade the range, is still in play.
CK and Han…
No doubt critical overhead resistance has come into play after last weeks powerful rally.
I am not going to let much of the 8% gain in XHB or the 13% gain in ECH slip away.
Appreciate the comments,
Agree with CK above, I don’t think this will extend past the last resistance level, wouldn’t milk that inverse h&s pattern too much.
This rally is a very short term trend that will quickly end when the next economic data release kills the buzz. The s&p was headed for an afternoon selloff before the authorities stepped in. The higher it goes the faster it will fall with the open chart gaps and shorts being taken out. Keep your stops tight and make sure they apply to extended hours. The bad economic news is almost at the doorstep.
Thanks for your viewership and comment. Appreciate both.
1,124 is the top of the sideways channel. With summer now over, next week will be key. I look forward to seeing sentiment numbers.
Given the price action of last three days, are you still confident (relatively speaking) of 1130 being a tough area of resistance or do you think from a technical analysis basis, this thing has legs to go to 1150-1160. Would love your response to my query. Do keep doing the good work. Your calls of late have been spot-on. Looking back, I wish I had not waited on the sidelines!
Ben or not, Homebuilders are on a roll…up 10% in 4 business days!
awesome post once again. I need inflationist Ben to shower my trading account with money from his helicopter.