SP Futures Hourly Chart Update for Market Close

There was a picture perfect breakout, at the intersection of our horizontal breakout resistance and the outer bound of the big downtrending diagonal channel.

So what next? While the futures remain in this tight channel a trader will not fight the tape, and no new shorts should be put on.

Now having said that we sold most of our straight up index longs into the close and did buy selective shorts into our hedge. Our bias is now short for a pullback potential off that touch on the big resistance at 875 which is now a very key level.

Trade this with care as the situation remains volatile. But as a rule of thumb when we see such a nice straight ramping pattern in the SP futures we assume that some big banking players are walking the index higher into a short squeeze. Its hard to miss as the will clearly signal their intention to the market.

Volatility remains high. The most important change is that this breakout has shifted the bias of the market from the bears to the bulls, and so now we are in rally mode until it fails. The failure points are obvious on the chart, at least for now.