In my weekend post I wrote that I am expecting a retrace to the middle of the Bollinger Band and then another leg up, and my forecast was right on the money, but I certainly didn’t foresee the bullish stampede we got today, I thought we will have some consolidation movement before going back up. SPY is now at the top of the channel, and we have a negative divergence on both weekly and daily charts, so in principle SPY is ready for a correction. I write in principle because the short term indicators are not quite there yet (see battle plan for details) , and there is always a chance it may never occur (we are talking about a probability based system), but I will not be surprised if we start correcting tomorrow.
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