Two similar wedges right down to the breakout and backtest?
EOD Update
The inverted head and shoulders formation is still developing and that trendline connecting the shoulders remains in play. A few things to consider for a move higher:
1. The wave structure down still counts better as a corrective.
2. A hammer reversal candle printed and closed above this trendline which I take to mean it is an important trendline.
3. The internal wave structure looks like a complete corrective count so one must assume that a potential bounce is in progress.
4. Price bounced at the 38% Fibonacci retracement off the 1249 low.
5. Price broke through the descending trendline off the 1339.46 high.
Here are few things to consider against a move higher:
1. Price still closed below the 20 and 50 SMA
2. The daily MACD sell signal was confirmed.
MINOR 3 TOP - OPTION
There are still so many ways to count the wave structure off the July. I still have several different scenarios to present, but to save us from massive confusion, I'll post my top two options at the moment.
Given the daily MACD sell signal, I believe Minor 3 is in and the market is working out Minor 4. This version is a tad bit different than the Minor 4 Option below.
I'm expecting a wave x bounce is in progress. See the remaining charts below for other reasons why a bounce is in store.
MINOR 4 OPTION
Based on this option a larger flat/triangle is in the works. We'll see and adjust accordingly as this progresses.
SPX - 60 Min
Here's a simple hourly chart. No matter how the internals are counted from the 1249 low, it is probably safe to say that 1339.46 ended that leg. I do believe it's possible to believe that it may have only been the first leg of a three legged move higher.
If the pullback is complete, based on this view/count, a wave 3/c up should follow to new highs. So we'll have to keep an eye on this structure since it would affect the Minor 3 Top Option I'm following.
SPX - 3 Min
Here's an internal count of the move off today's low.
