Four hour chart on the S&P 500 (SPX) has not experienced one single TD Buy Setup all year long. Since this time frame is still my favored choice for providing early clues for market changes, the current count suggests this Friday is the next test.
The Keltner/Bollinger indicator (K/B) is the most important chart for direction at this moment. For the K/B:
1> The high probability direction of this move is for continued highs. I have no concrete projections right now but SPX well above 1600 would not be a surprise given the long initial wave higher. This will fit in well for a wave 5 extension.
2> Bears are in the lower section of the probability curve. Based on experience, bears would need a failed break to the upside and then a menacing move to the downside takes over. This would fit in for an irregular top. If this is to occur, then the daily candles would need to reverse the upside within’ 2 days after the Bollinger band exits the Keltner band.
3> A bit lower on the list is this is an expanded flat. If so, it would be suggested that a reversal to the downside occurs today as it is nearing invalidation. A daily candle reversal pattern is what to look for.
The high print today for the SPX is 1586.39. If the highs hold, the bull/bear test begins at SPX 1558, the Fibonacci 61.8% retracement level. Above 1558, market is still bullish. (updated mid trading day)
Trade Trekker 