When I pointed out the potential bear flag on the 30-minute SPY chart yesterday, I did so within the context of a potential trap for eager bears to fall into, yet again. When the market is trending higher, seemingly textbook bearish patterns often serve to trap in bears. It is a cruel game, but one that Mr. Market enjoys playing.
As you can see on the updated chart below, the bear flag (purple lines) toyed with the start of a breakdown into the close, but then rocketed much higher today. We have been trending higher throughout this session. And into the final hour I would not be surprised to see a close on the highs. Either way, those who trapped themselves short yesterday might be in for some more pain before a reprieve is found.
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