Reprinted from pebblewriter.com
In spite of the indecision evidenced by this morning's post, I'm seeing a channel set up on the RSI that's tilting me slightly more bearish. It's the dashed, red channel on the chart below.
Remember, everything that's happened since April 4 is technically a back test of a broken rising wedge -- unless we break above 1422. It's possibly a replay of the events of Feb-May 2011 [see: Analog Details.] This back test correlates with a back test of the dashed, yellow TL on RSI (redrawn this morning.)
Viewed through this prism, the new channel makes a lot of sense. In 2011, a similar channel sent SPX down 45 points or so -- but that was after the H&S pattern had played out. In the current time frame, we had a bounce at the neckline and no follow through since.
One more thing: the purple trend line intersecting with that RSI channel. Previous failures to push through it have proven disastrous to SPX. All things considered, I'm going to layer on more bearish positions -- with tight stop.
Stay tuned.
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In spite of the indecision evidenced by this morning's post, I'm seeing a channel set up on the RSI that's tilting me slightly more bearish. It's the dashed, red channel on the chart below.
Remember, everything that's happened since April 4 is technically a back test of a broken rising wedge -- unless we break above 1422. It's possibly a replay of the events of Feb-May 2011 [see: Analog Details.] This back test correlates with a back test of the dashed, yellow TL on RSI (redrawn this morning.)
Viewed through this prism, the new channel makes a lot of sense. In 2011, a similar channel sent SPX down 45 points or so -- but that was after the H&S pattern had played out. In the current time frame, we had a bounce at the neckline and no follow through since.
One more thing: the purple trend line intersecting with that RSI channel. Previous failures to push through it have proven disastrous to SPX. All things considered, I'm going to layer on more bearish positions -- with tight stop.
Stay tuned.
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