Tuesday, March 17, 2015

Ending Diagonal In the S&P 500 Possible

Ending Diagonal In the S&P 500 Possible

This technical analysis video of the S&P 500 and the total put/call ratio displays a possible ending diagonal pattern forming since the October 2014 low.  It cannot be confirmed yet, but the first 4 out of the 5 waves of the pattern are potentially complete.  Ending diagonals MUST be followed by explosive reversals in price action as the video details.  If not, then the pattern is not really and ending diagonal.  An ending diagonal ENDS a major market move, and then price will explosively move in the other direction.

There is an FOMC announcement tomorrow which may lead to a market reaction.  Currently my expectation is for a rally into the end of the month.  Beware a breakout of the February high.  If a move to new highs occurs with broad scoped divergences in breadth, price, volatility, put/call ratios, and other sentiment measures, and a bearish top reversal candlestick forms around or below the upper boundary of the wedge, it could offer a great short selling opportunity for stocks.  

I will update as price action unfolds here in the coming weeks.

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