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ORIGINAL POST: 9:20 AM
Here’s where we left off Friday. I’m not thrilled with the idea of adjusting channel lines to fit with an overshoot of a target. Looks a bit hinky on the 60-min chart…
…even if it fits fine on the daily.
But, here’s the chart that really convinced me to stay short (from 1404, 10:30 EST in members’ section) over the weekend, even though SPX slightly exceeded my original stop of 1407. Remember, this is a short-term trade only. Our core position remains long.
The RSI ran into the upper bound of a well-formed channel (yellow) at the end of the day. So, it’s either break-out or break-down time – regardless of what price was saying.
And, in the 60-min time frame…
Meanwhile, the dollar was breaking out of a week-old 60-min RSI channel and appears to be setting up for a back-test of the broken channel and recently broken moving averages (10-day = 80.88, 20 = 80.78, 200 = 80.9).
UPDATE: 11:30 AM
SPX broke down through the important 1400 price level, and is likely on its way to completing a proper B-wave for this corrective wave on its way higher. Friday, I updated the primary forecast to reflect a significant sell-off into the middle of the week, followed by a strong recovery.
This scenario is in play if we reach the low 1380s in the next day or two — something that seemed unlikely on Friday, but would seem less so if we traded down through the SMA 200.
continued for members…
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