Hello Everyone,
Quick Notes: Following yesterday's reversal and weak close, the major indices all gapped sharply lower on today's open but managed to trim their losses by the close. The QQQ and IWM actually made their session lows during the first 15 minutes of trade as their next pullback formed a HIGHER LOW while the SPX made lower low prior to recovering. The intra market divergence during today's session was a positive indication that the SPX would likely recover as the session
progressed. In fact, both QQQ and IWM rallied up to fill their respective gaps before closing slight lower. The SPX, which had been outperforming recently saw heavier selling (profit taking) and was not able to fill today's gap. With that said, let's see if the SPX can hold above 4100 and rally from here to fill it's gap and potentially make another short term stab at another high. If SPX losses 4100, we are likely to see downside to around 4030-50 area. The bullish
mapping would be that this is simply a quick sharp wave 4 but prices must remain above 4000 area to keep this option in play. For now, continue to trade what's in front of you while remaining disciplined. The recent action has broken many charts (very sloppy and loose) which makes it more difficult to find objective setups so focus on fewer items with this increased volatility. The VIX did close above it's upper BB and will be something to monitor in the coming days.
Please take a moment to look at the trade ideas.
---------
5/6: SPX DVT = 4107, 2 day candlestick chart 4065