S&P Weekly and 5-day pattern 3rd quarter rally with this weeks move back above key higher timeframe levels.
As each day stalled around higher timeframe levels, and normally price would stall and reverse down into the 5-day 50% level and then continue higher, traders need to be reminded that each day is closing above the 5-day highs.
A daily close above the 5-day highs is a breakout in the 5-day pattern, and price will often continue into the next 5-day high.
If it keeps closing above the 5-day highs, it keeps going up.
Why is this pattern happening now?
It part of a higher timeframe 'thrust' pattern, as all trend orginate from 50% levels and push outward.
And a 3rd Quarter 50% level is a major trend guide that's going to push the market.
Thursday is the first day that the 5-day high has stalled price...
But there is still an expectation of a move into 960 in July
S&P Weekly and 5-day pattern
There was a view that there would be a consolidating trading pattern between the Weekly 50% level and monthly 50% level and then the trend direction would be decided on Wednesday.
The 5-day pattern played out precisely, moving up into Tuesday's highs and reversing back down, but not down far enough, instead breaking higher using Monday's highs as support.
I did have a view of higher prices from Wednesday towards 920, but I wasn't expecting it to happen on Tuesday because of the Weekly 50% level, but there is another breakout on Tuesday so it should continue higher on Wednesday.
The rest of this week...
Having a look at the current price action this week and back above the higher timeframe 50% levels, it seems the dip last week below the July 50% levels was a 'fake break' and the market is going to go higher in July-August.
However, I prefer to wait until this week closes to get a better idea on the direction, especially after an reversal back down into the 5-day 50% level.
Based on this UP move and back into resistance levels, it is unclear whether the SPI will continue up, but that will depend on US markets.
Often price will breakout of the 3-day cycle but then move into a 2-day stall (consolidation pattern) until the 3rd day, before price continues with the 'new' cycle.
Because price is hitting resistance and not above resistance. I favour a stall/ consolidation pattern at this stage.
S&P Weekly and 5-day pattern
As per Weekly report, I was expecting a 3-day swing back towards the Weekly 50% level, but not on Monday.
Even the UP move on Monday failed to hit Support levels for a swing back towa.rds the 5-day 50% level.
S&P is back above the Monthly 50% level but stalled under the Weekly 50% level.
Based on this pattern it is unclear which direction the S&P will take until after Tuesday.
I would think Tuesday will try and consolidate between 898 (Weekly 50% level) and 884 (Monthly 50% level).....
And then decide on the direction......
Back under 884 on Wednesday and S&P will try a push back downward:- Weekly 50% level failure and back under the monthly 50% level.
or Wednesday/Thursday continues towards 920-928:- monthly 50% level and a 1-2 day consolidating pattern above 884, and then price continues higher into Friday
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