Onward. Upward, or Look out Below…

Onward. Upward, or Look out Below…

S&P 500 Index Quarter Day Candles - Support, Resistance and Hourly Signals
S&P 500 Index Quarter Day Candles - Support, Resistance and Hourly Signals

Good Morning:

— We are still enjoying our last swing entries at 4775, yet guarded as this market continues to rip to new all-time highs.

— And the price is, once again, well above the daily mean.

— Our investment theory focuses on mean reversion. We know it will snap back like a rubber band, but we have to know at what price and when.

— I laugh to myself sometimes at all the coding and programming we create just to predict those moments.

— There is a simplicity to this if you can get in sync with the price and meld with it.

— There is a possible measured move to 4950 from the reversal pattern we identified a few writings ago.

— Price could consolidate a few more days or even retest the breakout at 4840 before reaching higher again.

— And in the background remains the measured move from the broad, cup and handle pattern previously discussed on these pages at 5600. But that will take time – likely months. 

— But 5600 is an eventual peak target should the market continue to trend higher. Of course, we could see a blow-off top reach out to that level quickly – a low-probability scenario.

— For now, make sure your stop is about two ticks below the five-day line and for sure at break-even.

A.F. Thornton

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.


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