I REMOVE THE SELL THE RIP BIAS.
I am getting suspicious regarding the potential bearish prospects of the current corrective pattern.
I don't like to get involved in a "battle" when bears have only achieved a 3-wave down leg.
I don't feel comfortable to be short when the McClellan Oscillator is oversold and it has issued a buy signal (Stochastic bullish cross)
- I Don't see a clear bullish pattern of VIX unless the trend line from the March 14 low holds, which could allow a large bearish flag. Yesterday's Inverted Hammer is suggesting for today a likely bounce attempt.
The pattern from the assumed top of the rally from the November lows so far has unfolded a wave (A) pullback followed by a likely wave (B) rebound. (Although the eod print above the 0.618 retracement is not bear's friendly)
Hence the pattern can still evolve into a Zig Zag or a Double Zig Zag with a pending wave (C) down which will most likely be bought once again.
In other words a meaningful correction (A Fibonacci retracement of the up leg off the November lows) will have a tough time to progress with an initial corrective internal structure.
Therefore if the next pullback is corrective and establishes another higher low then I am afraid that despite that a ton of technical indicators are leaning to the bearish side price may be unfolding a continuation pattern.
I am talking about a Triangle, which has a theoretical upward thrust of 34 points. (The tight BB are warning that a large move is coming... In my last weekend update I thought more likely to the down side, instead if the Triangle pans out it will be in the opposite direction)
Obviously the thrust following the Triangle will complete without any doubts the up leg from the November lows.
So going forward the internal structure (corrective/impulsive) of the next pullback + the ability of Bulls to maintain a sequence of higher lows will dictate of the probability that price is forming the last continuation pattern of the November up leg (Recall that SPX has not achieve yet to establish a new all time high).