That is the issue.
I have been discussing this idea that the bear flag on the S&P 500 might be too obvious to cleanly break down right away. Instead, the bear flag could morph into a longer base (more neutral in nature). With today’s gap higher, that scenario seems to have more credibility. If anything, it is another reason to be net neutral here.
That said, if we get a better-defined trading range, even if not off to the races, it should be more conducive to putting on swing trades, albeit with shorter timeframes. Again, a long base should permit range trading, if the bears cannot sustain the bear flag breakdown.
The range levels that I see thus far for the S&P: 1358 on the downside, and 1392 as resistance. I am looking to see if these levels continue to hold.
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if the employment report is decent tomorrow, 1392 is toast.