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Futures are up marginally as the tape is starting to have a tweezer look to it. That is when we get minor dips followed by minor highs. The top begins to squeeze together like a tweezer. It is a topping pattern if played out, but it does show the rate of change is dwindling for the bulls up here.
The move off of the lows has been impressive and as we warned at the lows, this is what happens when everybody is looking in just one direction (Lower) or where should they start shorting again. Most are always too early and used as the 2nd or 3rd round of short squeezes to drive the price even higher.
But make no mistake, once the bears are done trying, we will head lower.
The short zone has always been between the 4500/4600 and that has not changed. Joe & Co. has given a plethora of reasons to expect our economy will be in a recession sooner rather than later and his latest round of crushing our economy at the expense of the “green new lie” is the “Billionaire tax” As sure as I am about the sun rising tomorrow, once they realize they will only be getting 1/100th of the tax amount they are anticipating, we will all be in the “billionaire” status, for this tax.
They are billionaires and have the best accountants alive who will figure out how to hide their money from the man.
For today, the bulls need to get the price above 4560 for a reaction trade up to 4590. It most likely will not happen in one day, as I noted earlier, the rate of change has dropped dramatically. But if the 4560 is taken out and then used as support, we should see 4590/4600 next.
Use strength to build short positions and be patient.
The bears need to get the price below 4516 for a reaction trade down to 4457. That could happen in a day or two so the bearish divergences can kick in.
I still like the 4400 as a downside target and maybe even 4350. We may not see the real selling hit until some time in Mid-April/May, but we will see some tradable moves in both directions.
Stay alert and keep your trading hat on for now. -Gary Dean
SPX Hourly Technicals
Divergences: Bearish Divergences
Resistance Pivots: R1-4560 R2-4575 R3-4590
Support Pivots: S1-4520 S2-4490 S3-4457
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