Hard to be bearish, Immediate Term $SPX

Posted on Sunday October 04, 2015

After the start of the oversold bounce last week, and failure of the SPX to fill the 8/26/2015 Gap, I’m having a hard time with the Immediate Term bearish thesis at least this week and maybe next.

On a longer time frame, Bulls have tons of work to do, but this week and possibly next week, I don’t see the bear thesis. The price action is bullish.

  • Oversold conditions triggered and are being bought.
  • Divergence in the T2108 (% Stocks Above 40DMA)
  • We broke out of a bullish descending wedge, and dips were bought all last week. 

I think that a mild pullback Monday morning, possibly all day, would actually fuel the bull case. It would certainly make me even more bullish as it would potentially create an inverse H&S within the range. We do have the bullish wedge break, so it certainly looks like the 1967 Gap just above will be filled.

What would change my mind at the moment? If the bullish wedge breakout fails by breaking back below the downward trendline.

% Stocks Above 40DMA

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