I was tempted to go long near this afternoon's low just after 3:00 because I suspected "they" would jam the market higher again into the close. To say this market is being manipulated by some big money is an understatement (my guess the Fed/Treasury/PPT is behind the effort to get the banks on the winning side of some profitable trades--where better to get capital injected into their dead-fish companies). So at the end of the day I did a little butt-kicking for not buying it. But now the bigger question--will it last? If you look at a 30-min chart for price action since last week's high you'll see a few big white candles into the close (today we had one in the morning and then another at the end of the day). Each one was followed by a complete reversal and full retracement of the jam higher. If the pattern follows through we'll see a quick decline out of the gate tomorrow and a break below today's low.
So far the pullback from last week's high looks like a bull flag pattern and ideally, from a wave count perspective, it needs one more leg down to finish the count (for a double zigzag, a-b-c-x-a-b-c, count). For SPX I'm showing a drop to the bottom of the channel and depending on how quickly it drops it could find support in the 800-805 area. I'm showing a key level to the downside at 795--a break below that would be a breakdown from the flag pattern which would be bearish. It would also break the uptrend line from the March 23rd low (seen better on the 60-min chart at the bottom). A rally above 838, the key level to the upside, would confirm the bullish wave count and suggest a move at least up to the 870 area into opex week.
SPX 30-min chart:
That uptrend line from March 23rd could be the bottom of an expanding triangle pattern which can be considered a broadening topping pattern which is bearish. Another rally leg up to about 870 could finish the pattern. Above that and it could be off to the races with a big rally into May. SPX has been doing battle around its uptrend lines from March 6th through the March 30th low and April 1st low. So far the lines have been broken and are now acting as resistance on retests. But notice the break of the downtrend line on RSI--this is a heads up that price is about to do the same. Obviously an immediate rally Thursday morning would confirm that break.
SPX 60-min chart:
This a very difficult time to get a bead on this market. With all the choppy price action there are several wave count possibilities. I'm only showing what I consider the higher probability scenarios. Expect more chop and whipsaw price action until we get a break of one of the key levels and then follow the market in that direction (for a trade).