I'm sorry that I didn't post any updates on Thursday and Friday. Since last Thursday and until August 17th I'm in the army doing the yearly repetition course (as every other young Swiss man has to do).
I was hoping that there was a computer with some basic software on it, so that I could post updates. But unfortunately there isn't. So, until August 17th there won't be any updates (except for next weekend).
I'm really sorry that after my vacation last month I have to leave again. But at least this should be my last longer absence this year. ; )
On Thursday, the SPX broke the small channel to the downside and sold off. We didn't quite get to the lower channel line (of the big channel) as I expected but we still got a decline of about 20 handles.
On Friday, the market gapped up and rallied back to the upper trendline at 1390ish.
As you can see in the chart above, the previous high always provided support for a short amount of time. Once the SPX declined below the previous high again, the uptrend was always over and a multi-day decline underway. So, if we get a convincing break below 1387-90ish next week, the next decline should be underway.
We're back at the upper channel line and the resistance area at 1390-95:
If this area holds, we should see a correction next week. Possible targets are the open gap at 1365, last week's low at 1355, and the trendline at 1345ish.
A break above 1390-95 would be very bullish and most likely lead to a rally back to the highs to 1415-20.