Despite yesterday’s overnight dump and subsequent rally, the path to the Butterfly completion is still very much intact.  Though, it bears repeating (the 50th time?) that we might have already seen the top last week at SPX 1813.

continued for members…

Note that the Eminis feature a 1.272 extension that’s 10 points shy of the yellow 1.272 from the 2007-2009 decline.

What’s more, an A=C extension gets ES even closer.  All it would take is a Bat Pattern completion at the red .886 at 1805.83 and subsequent reversal at the yellow IH&S neckline around 1790.

Is it a stretch?  Absolutely.  But, if the markets gain a little more momentum today and The Street hears what it wants from the Fed tomorrow, it’s easily achievable.

SPX is set up for a Butterfly to the Butterfly.  A reversal at the red .786 and subsequent reversal at the .500 points to 1823.

UPDATE: 9:52 AM

ES has reached the optimal point for the IH&S right shoulder.  We’ll see if we can conjure up a reversal here at 1774.

UPDATE:  11:13 AM

It bounced, but didn’t hold.  The flag pattern broke down, and the RSI charts say we’ll get another deeper retrace — probably the .786 or .886 on SPX and the .500 or .618 on ES.

UPDATE:  3:35 PM

Another day, another busted pattern (so far.)  Looks like ES 1772 for the next move and moment of truth.

For SPX, the .786 at 1778.84 is important for the bulls to hold — probably test it in the closing minutes.

UPDATE:  4:05 PM

ES made it just after the close, but SPX stopped short.