Posted 8:05 am PST.
The most important price action in today’s intraday update is bull trend reversal after yesterday’s sell climax. Yesterday was a strong bear channel, which usually functions as a bull flag. There is a 2/3 chance of at least Ten Bars and Two Legs sideways to up today. The market had two small reversals in a small range on the open, creating a breakout mode setup.
There was a bull breakout at 7:55 am. and there was a bull body on the next bar, confirming the breakout. The bears want the tight trading range of the first hour to become the final flag, and the bulls want a test of yesterday’s 10:20 am lower high at 1970.50. The bulls should get a second leg up, but today will probably have mostly trading range price action after the tight trading range open and the repeated reversals yesterday. Also, yesterday was a sell climax day, and bear trends are usually followed by big trading ranges and not bull trends. Be prepared for reversals and swings up and down. Less likely, today will be a trend day.
Since today is a Friday, the market will be drawn to magnets on the weekly chart at the end of the day, like the high, low, and open of the week. Be prepared for a possible strong move up or down in the final hour.
Last week fell below the low of the prior week on the weekly chart, triggering a short. This week went above last week’s high, triggering bull trend resumption. This means that the next time a weekly candle falls below the low of a prior week, a second entry short will be triggered. This includes this week falling below last week’s low, if that happens today. If today moves below last week’s low and forms and outside down candle on the weekly chart, this would be a second entry short. If today does not fall below last week’s low, this week will become a sell signal bar next week for a micro double top and a second entry short on the weekly chart.