The sp500 today did not follow through on yesterday’s power down candlestick. Instead we witnessed a type of stoppage action and the volume also dried up considerably compared to yesterday’s SPY ETF Volume.
The sp500 is still trading within the somewhat large broadening wedge formation and continues to trade within this pattern.
The bears still have an opportunity the rest of this week to create a lower low with reference to the 2/24/2011 reversal hammer candlestick low. The low of today is still a higher low as compared to the low of that 2/24/2011 reversal hammer candlestick low. If the bears do not get the job done this week then one has to wonder if they will be able to get the job done at all. The opportunity is here and now in my opinion.
1300 to 1299 is still the key range that defines the bottom support of the broadening wedge formation. We may touch that tomorrow and reverse off of it. The other option is a surge higher tomorrow that holds the up channel supportive line.
Instead of guessing, I think it better to just reference the 2/24/2011 price low swing as a guide. If that swing low is not taken out this week, then the market may attempt to rally higher again to the other side of the broadening wedge formation.