“Iran all the way home just to say I’m sorry.” I Ran All the Way Home, The Impalas
Yesterday we flagged how the SPX had turned its 3 Day Chart down for only the third time since the April 7th low.
We offered that despite the likelihood of a downside gap and potentially bearish downside follow thru after a turn down in the 3 Day Chart not to count out the idea it could once again mark a low—just like the prior two instances.
Here’s the SPX daily we used yesterday.
Indeed Friday marked a low—for the moment—.
The SPX carved out an outside up day following an undercut of its 20 day moving average.
The dip below Friday’s low produced a weekly Plus One/Minus Two buy setup.
This is because the 3 Week Chart is up (Plus 1) and we have 2 consecutive lower weekly lows on Monday (Minus 2).
In fact the SPX is in the first Plus One/Minus Two buy position for the first time since the April low.
It is the first time the SPX has traced out 2 consecutive lower weekly lows.
It doesn’t matter how this week closes; the point is that the index went “into the position” Monday when the SPX traded below last weeks low.
As well there is the possibility that the SPX has traced out a big picture Stein and Handle pattern.
This is a cousin to the Cup and Handle except instead of a rounding Cup we get a deep V Stein-like pattern.
If the SPX is going to an all time new high, there is no excuse for it not to occur from here.
It is do or die.
It must be noted that a new high will complete 5 Waves up from the April low.
Of course all this is occurring directly in front of quarter-end.
It looks like a master game of distribution and institutions desire to trim/sell vertical winners versus FOGO (Fear of Getting Out) due to performance considerations.
It’s a master class in window dressing.
Let’s look at some examples.
CVNA has been a huge winner this year but set up a short for members on Monday based on recent distribution. We capitalized on it covering near session lows.
It rallied all the way back kissing its 20 hour moving average again.
TSLA was the star of the day.
Before the open we flagged TSLA was poised for an hourly Rule of 4 Breakout.
This is a breakout over a 3 point trend line.
We stated that TSLA had room to run to 334 and above that opened the door higher.
We closed the trade out at 340.
TSLA is a good example of a Gap & Go ORB (Opening Range Breakout, a move over the first 30 minute range).
Bot NET and ZS have carved out a sideways stint in the last few weeks.
Was it distribution or high level consolidation?
Hit and Run took both long in the last hour Monday. They both appear to be coming out after vertical runs since April
Fast moves come from false moves.
It will be important to that Generals like these don’t Jackknife back to the downside in coming hours/days.
An interesting twist on the undercurrent of these momentum names breaking out is Monday’s action in two new momentum leaders, CRCL and CRWV.
CRCL tailed off Monday on an expansion in volume.
CRWV also reversed on Monday but bounced from the prior breakout pivot.
It will be interesting to see how these two trade today.
In sum markets play out in three’s.
We are in the third week of a tight trading range in the SPX and NAZ.
July marked a high in 2024 and 2023.
Will this third July in the series mark another high?
They say they don’t ring a bell at the top, but they may ring a Taco Bell if it looks like Iran is just trying to buy time…again.
I mean after 50 years of negotiation, why should we be suspect.
Maybe they were just kidding around when they said death to America, death to Israel.