More often than not should you expect a breakout to occur in the direction of the trend. Prior to these volitale moves, traders are frequently wipsawed where emotions run high. This period of frustration is revealing in the form of a side stepping pattern that eventually tires out and leads to a runaway move. Experienced traders will use leverage to capitalize on these large moves where the potential for profit is at its greatest. In our case, this move may actually be at best the greatest shorting opportunity of your lifetime. Again, I want to reiterate that I do not give investment advice, and this site is for educational and entertainment purposes only. Do understand that markets are driven by emotion, so we are anticipating for some news-driven catalyst that supports the final upward move as early as tomorrow. Should the market not gap up tomorrow, there is a little wiggle room for a slightly deeper correction. I'm expecting the 1308-1310 area to hold, and here's why.
First, lets observe the Hourly chart below.
S&P Hourly Chart
Several Reasons why the target of 1308 will hold true.
1) The 1.618% Fibonnaci extention of wave 1 marked in blue gives a target of 1308-1310.
2) The upper trendline that has marked 2 previous points of resistance also comes in at the expected target.
S&P Daily Chart
3)The Upper bollinger band holds at the 1308.19 level. Again, another level of resistance.
The U.S. Dollar
Despite the Dollar's strength seen in today's session, the equities market was unphased. I'm going to assume that this is a larger consolidating pattern. If the market rallies tomorrow, the lower end of the consolidating pattern will hold as support and met with adding buying pressure.