“She’d say ‘Faster, faster, the lights are turnin’ red’” Life In the Fast Lane, The Eagles
“Success always makes obsolete the very behavior that achieved it.” Peter Drucker
Stocks opened strong on Wednesday.
The SPX notched a new high for the move since the April 7 low but in the afternoon
In keeping with the projection given by the Roadmap, the market weakened.
The SPX came two points from producing a Key Reversal Day sell signal.
Wednesday morning I created the following SPX daily which shows the open
Pinocchio’d the top of the Ending Diagonal or Rising Wedge flagged earlier this week.
This is the second Rising Wedge.
This years 7 week crash into early April was triggered by the SPX falling out of a Rising Wedge.
Fast moves come from false moves.
But buy the close the index was back within the boundaries of the Wedge and flirting with breakage back
Below the red trend channel.
Fast moves come from false moves.
I produced the red trend channel by connecting the waterfall low in early August 2024 with the crash low in early April 2025.
I then paralleled a line off the February all-time high,
This morning on news that Israel may attack Iran (presumably their nuclear facilities), we are gapping down.
In so doing the SPX is leaving a Breakaway Gap below this Ending Diagonal.
Remember that reversals out of these Wedges are dramatic and unforgiving.
The first loss is usually the best loss if you’re long.
Of course the lesson learned by the Street since 2008 is to buy every ‘dip’.
If one started their trading career anytime in the last 15 years they have been indoctrinated with that mantra.
They can hardly be blamed for having acquired that mindset
Not all ‘dips’ are created equal,
You had to suffer thru some horrendous ‘dips’ like January to March 2020 and Feb to April 2025.
Of course the vertical moves out of those lows took the sting out of the deluges.
One of these days we’re going to get a reversion to the mean where the waterfall just keeps falling.
That’s the way Mr. Market sets up the rolling pins…The Crowd.
While the decline from the first Rising Wedge looked like the real deal the market essentially rallied all the way back. Is it a Secondary Top?
I can’t help but think that a break of the current Rising Wedge will see the second mouse get the bear cheese.
Fast moves come from false moves and fast move from this second Rising Wedge could be unforgiving.