(chart above is from May 17th post.) S&P500 tanked to 1055 on May 21st and we got the short squeeze as we expected. At this point is hard to say, where are we going? I was looking for break down the “down trend channel” and S&P500 just did that. On Friday May 21st big institutions managed to save the market. S&P500 was going to close in red, but in last 18 minutes they shoot the market up 1.50% . It was the classic short squeeze. They were many weak hand bears who did not want to hold their short positions over the weekend, plus Friday was Option expiration therefore Friday action does not count. Consequently I need a couple days to digest the data before I jump in any conclusion. Many analysts talked about the 1065 level that makes it too obvious, I rather stay in the contrarian camp, and look for the next leg down, we shall find out by Tuesday what could play out?
Meanwhile pay attention to any violation of 1065 & 1050 levels. If S&P500 violates them it will tank to 1044 or lower. S&P500 has formed the secondary down trend channel I pointed it in purple in the chart . In last couple days S&P500 moved in this tight channel, and Friday short squeeze stopped right beneath it. If S&P breaks the channel we could shoot for 1100 resistance level.
In the case that big institutions decide to squeeze bears and send the market higher. Keep an eye on 1100 as the major resistance level then bulls must over come 1143 and 1152 (Good luck with that!! LOL) . In my eyes as long as S&P stays below the 1152 bears have the upper hand.
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