The SPX may briefly break above the diagonal wedge and hit multiple long term resistance areas. The SPX can't go above 3118 (the length of wave 3 in the triangle) or it will quickly accelerate upwards to new highs.
The market could then quickly retrace the origin of the entire 5 wave wedge, which is 2365. This would be a 25% decline in the markets.
A low-risk, high reward trade is to short the market as it breaks above the wedge but exit the short position if it goes above 3188.
The market could then quickly retrace the origin of the entire 5 wave wedge, which is 2365. This would be a 25% decline in the markets.
A low-risk, high reward trade is to short the market as it breaks above the wedge but exit the short position if it goes above 3188.