Stock Market Testing the Limits of the Diamond Formation
Stock-Markets / Stock Markets 2015 Dec 09, 2015 - 04:21 PM GMTSPX bounced from the lower trendline of its Diamond formation at 2056.00 this morning and is probing the 2-hour mid-Cycle resistance and the upper trendline at 2080.00. So far, the peak appears to be 2080.33, but it doesn’t appear to have broken the trendline. The top view is that the probe may be over and we may see a break at the bottom trendline soon. The trendline is now at 2058.00. While the Diamond formation has its own sell signal at 2058.00, the “official” sell signal is still at the 200day Moving Average at 2065.00.
The Hi-Lo Index has run up above its 50-day Moving Average, but since diamond formations often have jagged volumes and internals, I suggest we monitor, but stay short.
VIX also challenged its 50-day Moving Average at 16.05, but has since bounced back above its daily mid-Cycle support at 16.41.
Regards,
Tony
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