SPY Update

So far this has been pretty darn predictable, not from a typical technical analysis point of view, from that view it's been a mess, but from how the market uses technical analysis against technicians, from that point of view with op-ex today, it's been very predictable.

Yesterday I mentioned s topping formation that could be interpreted several ways, but that's semantics, the point is it was an intraday topping formation which argued against an upside breakout today, which makes perfect sense as I showed you the options chain last night.

Here's the topping formation that developed yesterday, which can be taken as a slanting head and shoulders or simply a triangle. In the case of a triangle, the dogma of technical analysis expects an upside breakout, so in reality if you watch the market, you know that the opposite will happen.

 I just measured the completed topping pattern and got a downsisde target of $133.35 and today's lows, $133.36. The break of the lower trendline set off some orders as you can see with rising volume.

 The 1 min chart showed a positive divergence at the lower trendline and we've bounced a bit from there.

I feel  little silly with all this micro analysis as the top, even with a false upside breakout, can be shorted right here. We're only talking about a few percent difference as the apex continues to tighten up which reduces the % move needed for an upside shakeout which reduces the position risk.

I still feel the most likely outcome is to see the upside breakout, but in the big picture, it' nearly semantics.