SPX reacted pretty much as expected on Friday. From the members’ section in the initial post:
…the odds of SPX gathering enough momentum to reach the red target have dropped dramatically. Instead, it looks more likely we’ll get a drop to 2093.55, the intersection of the white channel bottom and the former high.
If that fails, the yellow target at 2087.39 is still very legit. But, of course, that would mean a departure from a very carefully constructed channel. Given that it’s OPEX, that would probably be a head-fake — with the usual V-shaped rally following close behind.
SPX dipped slightly below the yellow target and appeared to be heading toward the red target price, but only reached 2085.44 before constructing a V-shaped rally into the close.
Late in the afternoon, we advocated taking the profits.
…don’t know which Greek news blurb to believe, so I’d go ahead and take profits here at 2107. Might well be leaving money on the table, but I’d rather pocket the 20-pt profit than risk giving it back later.
SPX’s bounce was built on a bounce by CL and USDJPY and a crack in VIX — all of which occurred. But, oil’s bounce has been completely undone over the weekend. It plunged to a 48 handle overnight, nearly reaching the purple .618 that could set up even lower prices.
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