Thursday, June 18, 2015

SPX Daily Chart Rising Wedge Versus Ascending Triangle

The couple-month battle of the red rising wedge (bearish) versus the green ascending triangle (bullish) patterns continues. In May, the thinner ascending triangle was in play and the bulls broke out above 2120 appearing destined for far higher prices but price retreated in late May returning into the ascending triangle and then collapsing out the bottom of the rising wedge in early June causing the bears to cheer.

Price recovered to back kiss the lower rail of the red wedge, a successful back kiss for bears, and collapsed again which placed the bears in the driver's seat but the thick green ascending triangle lower rail support held and bounced price back up again. Today the SPX launches higher and is at the breakout point of the baseline of the ascending triangle at 2120 simultaneously back kissing the lower rail of the rising wedge again. This 2120-2130 level is key and a winner will be decided in the days ahead.

Bulls need to continue up through 2120 then up through 2130 to prove they have the beans to move far higher. If so, the upside target would be 90 handles higher (the vertical side of the green triangle) which is 2210 (2120+90).

The bears need to hold the resistance at the lower red rail as price back kisses the bearish red wedge in this 2120-2130 range. The red wedge will actually remain in play up to 2145-ish but above 2145 the bulls will rocket to 2180 then to 2210.

Thus, the drama continues. Who will win? Will the bears win cheering for their red rising wedge where price is currently back testing the lower red rail, or, will the bulls cheer busting out above 2120-2130 to 2145 then far higher? This 2120-2130 resistance area is extremely important. As this is typed price sits exactly at 2120. NYSE floor trader Art Cashin identifies 2125 as key resistance which jives with the above analysis. The record SPX high is 2135 from May. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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