S&P has been hovering above 1800 for some time now and last Friday although we saw it make new intraday highs, the close was a bit disappointing. Prices were pushed lower towards 1804 just above the 1800 support level. Today bulls will need to break above the intraday pivotal point at 1808 in order to challenge 1818-20.
The sideways move is just part of a corrective phase in my opinion and Friday’s decline near the end of the session could be the back test of the initial upward breakout towards 1814. The short-term view and wave analysis favors the bullish continuation of the trend towards 1820-25 which was our initial target of a possible important top as can be seen in previous posts.
The upward sloping wedge is our main worry for now as this shows us that we are in the final stages of this upward move. The corrective pull back will definitely test 1775-80 but more can be said once we receive those sell signals if support at 1800-1796 fails to hold prices. We remain bullish as long as prices trade above support levels at 1795-1800, but will exit all longs if we see a break below that level. Our bullish target of 1820-25 is still very possible as prices remain in an up trend with higher highs and higher lows.
As always, thank you for taking the time to catch up on my thinking.