The SPX is forming a diamond pattern you can call it a diamond in the rough. An up or down decision will need to be made by price in the coming days and typically, the diamond would be expected to create a reversal to the downside from here. Diamonds Are a Girl's Best Friend.
Diamonds will tend to form after long downside selloffs, or long upside rallies, like now. As stated, it signals a potential trend reversal. The consolidations diamond consists of higher highs and lower lows in the first half creating the expansion behavior, and then followed by lower highs and higher lows in the second half creating the contraction phase and producing the diamond shape. Neither bulls nor bears are in control. Both are fighting each other and the lower highs typically set the stage for a breakdown.
The winner can be determined by the side that crosses their diamond apexes first. If price floats higher now and gets above 7600, a breakout, that tells you the bulls are still going to run and the bears will lose their shirts. What would be expected is a breakdown and this can be confirmed if the 7250-ish is taken out to the downside. The bears would then dance with glee as they slash downward at the bulls tearing flesh.
It is a diamond in the rough since a couple more days may play out before it makes the bounce or die decision. Little Darlin' was a huge hit by The Diamonds. Classic Doo Wop. 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.
Note Added Sunday, 7/5/26: The diamond pattern continues with price at the top rail at 7483. It is time to bounce (breakout) or die (stay within the diamond pattern).
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.