The State of the Trend
After correctly identifying two months in advance the downside targets for the April-June decline to within a point, OddsTrader did it again, and in the last two weekly posts nailed the target high for the subsequent 80 SPX point rally. Which brings us to our current state of the trend, which is mixed.
On the one hand, the SPX has been making higher highs and higher lows since June, but at the same time, there is a megaphone pattern in the making, and a bear flag is developing in both the daily:
and weekly SPX:
Depending on the time frame, the SPX is either bumping up against the 50% Fibonacci retracement (6m) or trading above support of the 23.6% retracement level (120 w):
Source: OT Fibonacci
In a similar vein, the index is trading above the OddsTrader pivot line on the weekly chart, but closed below it on the daily. Market internals show marginal deterioration from last week, and continue giving equal weight to a move in either direction. In the presence of such mixed conditions we will get our cues from the first chart above and will let the SPX tip its hand by breaking above 1340 or below 1320.