Looking at the second chart first, everything about this, using conventional Technical Analysis, says the SPX (S&P500) is going higher. Horizontal and vertical resistance has broken to the upside. StochRSI(30) is above the mid-line and headed up indicating that the Index is in an uptrend. The Daily MACD has broken above the Zero line - which is bullish.
So - every trader and their dog should now be long.
OK. Looking at the third chart, the SPX has just hit the 61.8% retracement level - a spot where trends often reverse. One mark against the conventional view - but hardly convincing.
Next, the last twenty-day high was four days ago. This sets up the possibility of a "Turtle Soup Plus One" situation. If the SPX drops below the low of four days ago, 1105, then a retracement of at 2-6 days will probably occur. A retracement of six days would almost certainly break below the low of two days ago - 1086 and that would spark further falls.
What are the odds of the Turtle Soup Plus One setup completing - about 70%. That's not bad odds. 90% would be better. :) but not bad.
Interestingly, the Ozzie market is not as bullish as America. A new 20-Day high has not been created. The XAO has stalled below the 50-Day Moving Average. The daily MACD is still below the Zero line.
Does this lack of confirmation mean anything? The Australian market often pre-empts the American market. So the less than strong performance by Australia today, after a strong performance in America last night, could be a precursor to weakness in America tonight. This may then flow into our market tomorrow.
We shall see.
That's a long story with lots of ifs and buts.
I'll be waiting to see how tonight pans out in America. If it is once again strong, then a test of the January highs is probably on the cards. And we will probably follow.
It's up to you what you do. :) I'm just an old grandfather enjoying my grand-kids and playing around with charts.
Cheers
Red
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