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The Red Pill or the (Reddy) Green Pill
SPX made it to 1990 yesterday, within a handle of the full double top target and we may well see a bounce here. SPX, NDX and RUT have all formed decent patterns from the high and the falling wedge on SPX is breaking up at the open.
The falling channels on NDX and RUT have not broken up yet.
This is a short term inflection point and either we see a bounce to retest the highs, and most likely fail into a larger decline, or we see a break of yesterday’s low and continue the decline. The best bear day would again be from an AM high and fail. The (short term) bull case is best expressed on the NQ chart, where the low yesterday established a very nice falling wedge from the late September low. This chart supports a retest high and fail as long as that wedge support holds.; NQ 60min chart:
Ryan Mallory is the co-founder of SharePlanner Inc, a financial website devoted to Day-Trading, Swing-Trading (both long & short) and exchange-traded funds. Ryan makes a strong emphasis on risk mitigation strategies, trading transparency, and trader education – not to mention a great set of stock screens as well.
Be Sure to Check out Ryan’s Site at Shareplanner.com
Source: http://www.shareplanner.com/featured-blogs/network-blogs/channels-and-patterns/21614-the-red-pill-or-the-reddy-green-pill.html
