With Wednesday showing some choppy and bearish closing action, things are a little more uncertain. However the key levels are clear.
First resistance is the recent low of 1306. The daily 10MA of 1305 will also be strong support on any early Thursday declines - if we get them. In contrast, the bulls need to see a break over 1335 to confirm wave'C is underway - and break/close above the bull flag.
However, lets be clear, if we do somehow slip into the 1280s..this could get fast and dirty real quick - not least due to the Greek elections this weekend.
IWM, bearish outlook
SP' daily, 4month
Both the hourly and daily charts do display possible inverse H/S formations (not labelled), as well as a bullish flag - as comprised of the last 5 trading days.
From a MACD (blue bar histogram) cycle perspective, we are VERY high on the cycle, so the bears can claim we are due for a pullback. Although I'd consider these past few days of sideways chop, the pullback/consolidation that they have been looking for.
Primary target remains sp'1350/60 for the peak of wave'2.
With the market facing more choppy action due to Quadruple witching this Friday, it now appears that wave'C of 2' - if that's what we have, will not be complete until the middle of next week - when the Federal Reserve is due to announce its latest action (or lack of).
So, an interesting day, I remain on the sidelines, waiting for wave'C to complete before shorting this nasty market.
A little more later...