In last weeks review, I speculated that 1970 (ES futures) / 1980 (SPX) could arrest the decline. As we got closer, I sent out an alert (http://stks.co/c1N54) and a bullish chart on the day before the reversal (http://stks.co/p1A9X).
Despite my bullish message, I was completely surprised to see that we made a new high within only 3 days. Clearly these markets behave abnormal, conditioning investors to expect impossible recoveries. The last two cases clearly exceeded the norm here.
The bullish message is still intact, and the seasonal tailwinds could keep this rally going a little longer, but we can see that we are now struggling a bit and may thus need to pull back a little bit first.
The hourly chart shows that we peaked the previous high twice and failed twice. Each high exceeding the previous high, possibly running stops of early bears, before reversing. Although expect a pull-back that should exceed 2050 (to set up another bear trap and take out stops?) before advancing further, the markets are seemingly getting less stable. I would still expect the SPX to make a dash for 2100 though.
Crude futures have broken the down trend (http://stks.co/p1BEf), but curiously stopped at what could become a triangle wave 4 consolidation before we get a final leg down.
Bonds also saw a quick reversal, but the lack of volume and the pattern makes me suspicious. I bought some after ES had retraced nearly to the highs and may lock in my profit.
This will be all for today, since I am taking the weekend off to spend with my family.