click on image to enlarge
At the end of my last post I gave a ‘head’s up’ regarding a potential bounce off trendline support (see the green trendline on the chart above). That worked for a support target (since no closes below), but as it turned out the actual bottom came a day later on a perfect touch of the blue trendline that is drawn as a parallel to the same trendline that connects the recent tops.
So long story short… those major trendline support touches are why we are seeing a bounce here.
click image to enlarge
The short-term trend has flipped to bullish on a cross above the stop/reverse line at 2690.25. Next target higher is the descending short-term range envelope top, which is currently at 2757.50
Let’s watch and see how this short-squeeze launched from the parallel channel bounce unfolds. Election Day is now just four trading sessions away and that is what is and has been driving this current market action. As always, the pros will leave themselves pre-positioned favorably, no matter what the outcome.