S&P500 Consolidation 30-Minute Chart

As a follow up to our Triangles conversation a few days ago, let's look a little bit deeper into the S&P500. The chart below is broken down into 30-minute time frames and shows the converging trendlines above and below the consolidation:

A move out of here should take us about 75 points on the S&P500. If we take the size of the base (~1290 high and ~1215 low = about 75 points). More often than not, these sort of consolidations breakout in the direction of the underlying trend, which is up. But in this case, the market has a ton of supply at these levels from broken support from March and June. We broke down how polarity works a few weeks ago. The selling here still has not stopped.

Whipsaws in these sort of patterns are fairly common, so don't be shocked to maybe see a temporary breakdown out of this triangle, kiss the rising 50 day Moving average around 1205, and then rally back to make new recovery highs.

We don't know for sure what is going to happen so we want to be prepared for every scenario. The market is trying to make us all look foolish, let's not forget that.

On your toes....

Tags: $SPY $SPX $ES_F