Cobra wrote:Double bottom, maybe the pullback was over. May test the previous high to see whether bears could make a double top.
Some current musings from Springheel Jack:
"The holidays are ending and volume should be coming back into markets this week as players return. New Year's Day on Wednesday is a holiday. Nothing has changed on the bigger picture scenario, where we see a top forming here for a decline into April, and then likely retests of these highs from there.
Note that the last trading day of the year is, historically, the only strongly bearish day in December, with SPX closing down 67% of the time, and Nasdaq down 15 of the last 19 years.
On SPX the daily chart on Friday closed with both the RSI 14 and RSI 5 at high levels, and some negative divergence on NYMO, setting up a possible RSI 5 / NYMO daily sell signal if SPX retraces a bit and then retests the high to set up negative RSI divergence on both RSI 14 and RSI 5. Decent odds we see that play out over the next few days.
On the hourly chart SPX is testing support on the short term rising wedge from the 3070 low. An RSI 5 sell signal has fixed and an RSI 14 sell signal is brewing. On a breakdown I'd expect this setup to deliver a retest early next week of key short term trend support at the 50 hour MA, which closed Friday at 3218. From there ideally SPX would make a marginal new all time high, and then fail into a larger move down."