Around 3:30 day traders (what's left of them) start exiting the market, the trade around that time has traditionally been misleading due to their exiting positions. The 3:30 to 4 p.m. is where institutional money is most active with regard to trade that counts as far as analysis, the a.m. trade is usually very manipulative and deceptive, either taking out limit orders/stops or setting up a head fake move that can be used later.
The support Wall Street has thrown behind the market has kept it afloat as we haven't lost much ground since the open, but we have had some bad fundamental news pressuring the market, as I mentioned many times, "Once Wall Street invests in a cycle, they rarely let it fail", this cycle started April 10th and is a volatility shakeout of the shorts and a bull trap for the longs before they take the market down. The shorts being squeezed on the break at SPX initial support lent momentum to the SPX $1400 move, now they'll be trying to get the bulls trapped to lend momentum to a downside move that has been long in the making.
Unless you are a VERY short term and very nimble trader who is willing to risk a long position in a market that can crack at any moment (I'm pretty aggressive and I wouldn't take that trade), today was not a day to trade, but to be patient which is your biggest edge over Wall Street, you can pick and choose your battles on terms that you define.
ES continued support is starting to pay off. Watch ES overnight for a possible Gap up tomorrow.
The intraday triangle... As I said early on today, a 'u' shaped reversal is not likely, but rather a longer 'w" type pattern, the point being, they need time to get large positions in place, even if they are meant to be very short term in nature. I also warned, watch out for the shakeout/head fake move, that happened on the break below today's triangle's apex, the apex is approximately at the red trendline. Since this capture, we are well above that area. This is a lesson that we have learned thousands of times, no matter what timeframe, daily, weekly or 1 minute, the head fake move is there about 80+% of the time before the reversal, it is needed for momentum on the reversal and you'll see what they did with the head fake move below.
SPY 2 min intraday positive divergence, look at the relative 3C level at the head fake break below the triangle, price is at the intraday lows, 3C is making a new higher low, increased accumulation as they pick up shares on the cheap that were stopped out. The leading positive since looks good for what I have been expecting, although today was a tough nerve racking day, I trust the charts.
Look at where 3C is at the head fake move below the triangle compared to earlier levels, the stops were accumulated as well as the short sales.
We are on track.
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