This week was a bit frustrating, to say the least. Given the price action in the S&P leading up to this week I thought the diehard bulls had breathed their last breath and we can get on with the show. But alas, the bulls are still gasping for air and clinging to this 200 week EMA which served to kill a lot of short term bears and churn the hell out of their accounts. But all is not lost.
I am specifically highlighting the June price action on the weekly chart on SPX500. Look at all those candlestick wicks. Using my awesome powers of 20-20 hindsight, I can see all that support coiling up underneath that 3900 resistance line where the weeks opened and closed so perfectly 5 weeks in a row (Red Outlined section). Then the breakout in July occurred and the rest is history. Well, take a look at the past 4 weeks (Purple outlined section), with weeks opening and closing at 3590. And then look at all those candlestick wicks on the top. There’s a message being told to us here.
I am bearish for so many reasons which I know some people may dismiss or disagree with. But to all who kept on warning me about the basing support in June, I implore you to just take that little block of June weekly candlesticks and turn it upside down. That inverse of June is what we have been seeing for the past few weeks since the end of September. I’m still short, stops for my entire position are updated to above 3820, but the next two weeks will determine if I am right.
Caveat: I am typing this up on Thursday night, so this week’s candlestick hasn’t closed yet. Friday could always push higher and completely squash my thesis here. But them’s the breaks, as they say. Like I said, my stops are in place just in case I am wrong.