Won't know if this is a continuation or reversal until we see strong volume pushing price above/below the handle formation, and holding. The daily/weekly picture for SPX is not as doom and gloomy as short sellers would like. A lot of investors want to see the upper channel of the multi-year trend channel tested once more before we go into full recession mode sell-off. The handle is bullish in terms of weak (falling) selling volume, hence the sideways action in the handle. Price WANTS to move up, and RSI bottoming is occurring on the lower time frames revealing that buyers are looking to get the MA pointed up again. Price targets for a bullish breakout would be $375-385 using conservatives estimates. We still need to see 2-day/weekly RSI peak before the bulls relent. Not opening a position inside the handle until we get a breakout and confirmation (long or short) -- but leaning towards long for above reasons.
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For 10/15: I want to see price bottom @ 347.25 once more and then bounce. That would be a good time to open a long position. If it breaks below 347.25, expecting a quick fall to $345.50. Just depends on how many weak hands need to be shaken out. Volume has been low the past few days; seems a good heart palpitation is in order before we commence the bullish plan I've outlined above. Fascinates me to no end how the morning traders adhere to whatever dynamics went on during after-hours trading session. But I'll play along until it fails.
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Looks like afterhours crowd got caught in the bearish news flying over the international tube. The daytime traders quickly pulled that back. Still lots of interesting opportunities to scalp or get in at an optimal price point given the trend/framework. Reversion to the mean is the name of the game.
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LONG 547.25 w/tight stop (very low probability of limit-down overnight) TARGET 549.50 (Watch & wait for handle breakout)
It's too early to tell as the handle needs more time (days) to form?
SLOPolarBear
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@FUNSB, Handles vary in terms of time they develop. The usual criteria is that it retraces 1/3 but no more than half of the depth of the cup. The shallower the handle, the more bullish it is. The chart above is deceiving because I was looking at my 2-day chart (helps eliminate a LOT of noise on the SPY) when I decided to write this up. Watch for potential breakout tomorrow. If it fails, price will invariably fall back to the bottom of the handle and break down further or pop back up again. But we really need a big heavy volume candle to break above the handle (that's the tell). RSI and volume-flow was increasing steadily across the day. It's primed and ready.
SLOPolarBear
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@FUNSB, This is a better perspective of the handle: