Candle Cal takes another crack at navigating SPX trends. This time he stops to consider whether rock climbing is in the cards.
Target: ~2360
SL: 2770
Cal is one of those down to earth people. He realizes, well, it's pretty darn hard to break a 9 year trend. And since that smaller upward channel is already showing weakness, why not hop down a few hundred to consolidate? Originally, Cal thought this correction would come by August. Not so! It began early, and thus the second leg of our journey must begin early as well. Cal is expecting the next leg of the downtrend to begin within a week. He wonders, perhaps Monday, May 28th?
Some things to take note of:
Target: ~2360
SL: 2770
Cal is one of those down to earth people. He realizes, well, it's pretty darn hard to break a 9 year trend. And since that smaller upward channel is already showing weakness, why not hop down a few hundred to consolidate? Originally, Cal thought this correction would come by August. Not so! It began early, and thus the second leg of our journey must begin early as well. Cal is expecting the next leg of the downtrend to begin within a week. He wonders, perhaps Monday, May 28th?
Some things to take note of:
- The chart has a triangle formation beginning in January.
- The long-term "floor" goes all the way back to the bottom established in 2009.
- This will be the fourth time the floor gets tested, but economic conditions are not sufficient to break support.
- Rather than the resistance facing a breakout on its third test, this latest blip is a dead cat bounce which has established a longer-term trend's upper bound.