A Head-and-Shoulders Top (HST) has formed in the intraday chart that implies a drop to O1 at 865. The neckline (NL) of the Head-and-shoulders Bottom (HSB) in the daily chart, that I've been expected the SPX to retest is at 875. We also have an unfilled gap just above G3. Some buying should come in just under 880 from those trying to accumulate as they expect G3 to fill and they want to be sure to position long so they put orders in just above G3.
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I expect the SPX to drop to 880 possibly in some late selling into today's close. But I don't think there is much downside left. Therefore, I'll go 100% long at today's close with my accounts not controlled by mechanical methods as long as the SPX is still below 895 at my cutoff time.
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We have two unfilled gaps overhead which I think will soon fill as the SPX moves substantially higher.
As you can see in the chart above, we're very close to the retest of NL. There may be more downside but today's close could be the lowest in this retest move. The line that I've wanted to buy at for the last month is S1 above which is at about 855 today. We still may test S1 in the future but I think S1 is about the lower limit on any downside in this current move.
