Back On The Three Day Rule

A very nice day for calls yesterday (buffs fingernails modestly) with RUT following through on the falling wedge I called in my AM post, the possible trend up day I called playing out, and then calling the likely (and actual) high of the day in the afternoon just after it was reached on twitter (shjackcharts). Hoping some of you guys caught some of that and the perfect SPX rising wedge from the low that I posted on twitter with the high call.

SPX broke back over the 5dma yesterday and that puts SPX back on the three day rule. On a break (2 handles +) back below there at the close today or Monday, that would require a retest of the current retracement low at 2119 and likely lower low. With the 5dma at 2137 at the close yesterday that wouldn't be a big move though. SPX daily 5dma chart:

The high yesterday was a test of both broken support at 2148 and a precise retest of the 50 hour MA as resistance. That leaves this downtrend intact, and we could see a marginal lower low, though I'm not really expecting much more than my 2108 weekly punch stat target if we see that here. At this point I'm thinking that the retracement low is likely already made or about to be made, with a decent rally coming in the next few days which ideally would make a new all time high in the 2210 area in a few days, making what might well be the second high of a double top setting up a considerably larger retracement than this one. . SPX 60min chart:

The rising wedge for yesterday's trend up day is shown on the chart below and the obvious targets here are either one of the 50% fib retrace target at 2135 (testing now), or the 61.8% fib retrace target at 2132 or on a break below 2130, then a retest of the current retracement low at 2119 and a likely lower low. I'd like to see main rising wedge support in the 2095-8 area tested, but I'm a bit doubtful about that at this stage. 5min chart:

I wouldn't be surprised to see a low at whatever level this morning followed by a strong reversal back up. A trend down day seems unlikely at the moment. Everyone have a great weekend. :-)