Well gang, we dropped right to that rising yellow trendline and stopped... for now at least. I'm showing you the 4 hour chart this morning as I want you to notice how it's trying to turn back up right now, and how it looks similar to the low around 5/13, which turned back up from around the 20%+ area (we are closer to 25% currently) to rally into around 5/16 where it popped over the center line briefly and looks to have tagged about 70% or so.
From there it drop again into the 6/2 low in the ES price be that MACD line made a "slightly higher low" in the 20%+ area this time. That's a positive divergence on it for sure, which indeed put in the low and allowed a rally up into the 7/29 high. Pattern never repeat exactly but similar is common. So my thinking is that the bulls will hold this rising yellow trendline today (and 2874 for the double bottom) and turn that 4 hour MACD back up late in the day or tomorrow and produce a rally up into Friday or Monday.
After that we'll have to see if it looks ready to roll back over again or continue higher. The DOW is at a critical level too as it tries to hold the even number 26,000 level and the 200 day SMA currently at 26,064.77... which is another reason for a bounce here. The SPX has it's 200 day SMA at 2874.37... so it's no coincidence that was the low yesterday. I took a long yesterday via selling a put credit spread (291/290) that expires next Wednesday as my thinking is that we'll be well over 291 by expiration if a similar rally happens like that 5/13-5/16 bounce.
It always feels scary at times like this, just like 2 days ago when the market gaped up and ran to 2994.50 while I was stuck short. But that October 1st high was indeed a bull trap as the market fell off a cliff afterwards and put us over a 100 points lower to the current level we are at this morning. I feel the same right now as I did then, like I was wrong in making that decision to short like going long yesterday. And I suspect today will be a slow grind sideways day to keep me guessing more on my decision. I pray to God for patience today, as well as every day. Give me wisdom, courage, strength and discernment as well please Lord as this market is run by satan and he's a tough one to trade against. Where's my fiddle Johnny? Have a wonderful day.