S&P 500 futures were up off the PPI and after a retrace in the first half hour of the day session, SPX has been on a steady climb through the morning and into the early afternoon. I suppose the conventional wisdom is that it should be clear sailing to the spike high from yesterday and perhaps more. I acknowledge that as a possibility as there are upside targets for a possible lower high to that of early February. Here is what that would look like.
However, I want to at least entertain how things could go wrong with that plan. What if today turns into a somewhat exaggerated repeat of yesterday? Perhaps everything since the late morning low yesterday is just part of a corrective formation? That hypothesis would enable the rise today to be a ‘C’ wave in a wave (II). It would look like the following chart. Net, long traders should be raising their stops here in the mid-afternoon. Probably too aggressive to fade unless there is a drop under the bounce high from yesterday around 4153-54.
Another interesting chart is Euro where there has been a retest of the February 2nd high. Could there be a double top?