So the test of the 4055 reaction target with a high of 4065 before sellers took over.
In yesterday’s report as the spx was -20+, I said the bulls/markets look ill, but I would prefer looking for a bottom rather than shorting in this area.
We did see a reversal from -20 to +20 as the spx closed +10.
This morning we are seeing the bulls try and start the short squeeze ahead of the cpi numbers.
I do not see any sell signals on the /es, but a bad cpi number could make futures crumble in this binary market environment.
If we get in line or better than expected cpi, the squeeze will start kicking in today.
Either way, it is short-term dangerous on the short side, with the safest trade shorting these squeezes that take place often.
Same game plan as yesterday: For today, watch the 4043 spx.
The bulls will need to get above that pivot before even considering a long side trade.
If the bulls can take out 4043, then we should see a reaction trade up to the 4065, which is a more important pivot for the bulls to breakthrough.
If the bulls can get above the 4065, we should see the short squeeze start and a reaction trade up to the 4150/4200 level.
If the bulls fail to break resistance and yesterday’s lows are taken out, then 3940/3930 is the next support zone. -Gary Dean
SPX Hourly Technicals
Divergences: Bullish Divergences
Resistance Pivots: R1-4043 R2-4065 R3-4095
Support Pivots: S1-4000 S2-3956 S3-3940
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