Last post: S&P500 Thrust Ahead! called for a thrust up out of a triangle. We did get a nice spike up to 1181, followed by a back-test that was deeper than expected. While still maintaining the rough target of 1195 in the near-term and 1220 in the short-term, i would urge caution going long here.
Reasons for Caution
Refer to the hourly chart-below.
- Price close enough to uptrendlines to allow a break anytime.
- Triangles precede the final upmove of the wave they are in.
- Overbought levels + Negative divergences on daily chart.
- Good news seems to be trickling in from the economy - markets go up on bad, at this stage!
No hurry to go aggressively short, without confirming price action. A correction here, has multiple supports, and hence will take time to do any serious damage. Easy long money has been made. Expecting rising volatility, with a generally rising market into may. Watch out for sharp moves down and reversals, as we go about forming a medium-term top into next month.
In the very short-term, the decline from the thrust was sharp, but in 3-waves. Hence, expecting some consolidation below 1181 before a break upwards. On the other hand, a break below the uptrending lower line of the triangle on the 5-min chart, would make a test of support at 1154 likely.
At the risk of sounding too obvious - remember, the market is always right! All the best for the week ahead.
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