Greetings from Houston. I’m still on the road, but wanted to toss out some thoughts. The Bat Pattern that completed yesterday is holding, with no breakdown or break through the prior highs. SPX sitting tight at 1700.
That’s about to change, of course. The key level on the upside is SPX 1710 (ES 1705.) A drop through SPX 1695 probably targets 1657 and, ultimately, 1600.
The dollar suggests equities downside, so I’d bet in that direction with tight stops — as the potential for a positive surprise far outweighs the negative.
No taper. ES through 1705. Buy.
UPDATE: 4:15 PM
ES tagged our initial target, the 1.272 of the drop from 1685 on May 22. The more legit target for that pattern is the 1.618 at 1767. An alternative is the 1.618 of the drop from 1705 on Aug 5 which targets 1755. We could still get a decent reversal here, but I’d rather stay long with loose stops.
At this rate we should arrive at ES 1837 by Oct 7-11. Note, this is the same interim target we posted on the chart below on Aug 23 — the most bullish case.