UPDATE: 10:10 AM PDT
The bears are hanging in there, not about to go quietly. We've dipped below the 1272 target I had in mind, and did something interesting in the process.
The rising wedge I drew this morning (bottom chart below) was a little too cute. It led right to 1320. Since rising wedges almost never reach their apex, but fall out somewhere around the 66% (time) point, this troubled me. It meant I either had drawn it wrong, or we'd probably not reach 1320 anytime soon. The market just told me which.
By recasting the wedge as a channel, the market has adjusted the upside from "40 points" to "unlimited." If we can hold at these levels, and at least bump along the bottom of the channel, we should close somewhere between 1272 and 1275 on the day.
Staying in the channel guarantees only 6 points per day (at this slope), so I expect a swing to the channel top either today or Monday. One caveat: the H&S we just formed on the 5 minute chart. If it works, it has downside potential to 1258.
UPDATE: 7:25 AM PDT
SPX just completed a little Gartley pattern on the 5 minute chart. Didn't think it would fly, as the B didn't quite make it to .618. It might take us down to the .382 line at 1272 before we start up.
I've been watching the 5 minute chart intra-day, as it has an uncanny ability to forecast short-term turns on its RSI. A touch near 20 almost always marks a bottom, and 80 or above a top -- though it can and does "overshoot" when the momentum is strong.
ORIGINAL POST: 6:50 AM PDT