Algos are misbehaving…
SPX went higher this morning, giving us a new formation…an Orthodox Broadening Top. SPX already has a Broadening Wedge formation, but it has been a year in developing. It may still be valid, but shorter-term chart formations may take precedence.
The Broadening Top explains why we are being whipsawed in all of our indicators as the algos attempt to sweep away the losses. This is indicative of a very confused and emotional market…and tells us that there are big players that may be caught on the wrong side.
The formation indicates that SPX may still rise to 2745.00 but a failure at this point is not uncommon. In fact, a failure to make a higher “point 5” increases the bearishness of the formation.
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