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Currently SPY has broken out of the small triangle shown in yesterday's post. It appears set to test the 198.40 harmonic zone.
As I type, there is a developing multiple time frame stochastics set up which appears to be setting up an ideal short as price reaches this harmonic zone.
- 5 min overbought
- 15 min overbought
- 30 minute overbought
- 60 minute likely overbought later this afternoon
- Daily nearly overbought today; possible overbought tomorrow
So if signs of bearish divergence on the 60 minute and under time frames show up without last Wednesday's high being exceeded, that seems to provide a low risk entry for a short position with a possible stop above Wednesday's high.
Even if Wednesday's high is exceeded, the multiple time frame analysis still suggests that the short term is basically overbought within a weekly time frame downtrend where stochastics has not yet become oversold.
Remember the FOMC announcement tomorrow. This will likely bring some volatility into play tomorrow afternoon and beyond.
Pete
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