Yesterday I had suggested that we may see a pop to (falling) Cycle Bottom resistance at 1757.86. However, the bounce already seems to be failing. There is still a possibility of another probe higher, but a move below 1748.00 (the Broadening Top trendline) may signal the end of the dead cat bounce.

The Orthodox Broadening Top guidelines call for a probe back within the formation once the lower trendline is broken. You can see the smaller Broadening Top only had a miniscule probe inside it. It is still possible that there may be probe higher in the larger Broadening Top, but be on the alert for a breakdown that may happen quickly as well.

However, as bearish as these formations may seem, the Ending Diagonal is a much more potent formation. The next target is 1720-1724.00, the Ending Diagonal trendline.

Regards,

Tony

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