On Tuesday the cash S&P500 formed an “uptrending” price bar on the daily chart. This is where the bar’s high and low is both higher than the high and low of the trading bar preceding it. This type of price action raises the odds that Monday’s low was a Level 1 Price Reaction Point (PRP). If so it would mean that the short-term upward move I spoke of yesterday may well be underway. If so it should run its course over the next couple of trading sessions and as bears we don’t want to see such an up-move exceed the “I was wrong” point (stop loss if you will) of 832.98.
As an interesting Fibonacci point please note that the 779.81 low on Monday was at 127.2% of the 3/25-3/26 swing and a 78.6% retracement of the move from the 3/20 PRP Low to the 3/26 PRP high.
Overhead resistance (see today’s chart) lies in the gap from 812-813 and then again from 820-822 and 826-827. On the downside support remains as outlined yesterday.
My Elliott roadmap continues to have the view that we get a new low (below 666) before a potentially large multi-month rally can unfold in equities. As yesterday ended both the month and the first quarter I can tell you that both charts are showing continued bear trends and are still not exhibiting technical buy signals at this point.
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