Dueling Signals, Squealing Stocks

In a news-driven reversal with the 8:30 a.m. report indicating no inflation increase in the latest monthly report, markets reversed a 25 point decline in the futures.

Traders immediately took the futures to a 25 point advance ahead of the open.

For the rest of the session markets struggled to stay higher but the run-off produced a new SPX closing high.

Technically, the SPX responded to the 1 2 3 Pullback setup (as well a +1/-2 buy pattern) flagged here yesterday.

While the SPX delivered a new closing high it did not strike a new intraday high while testing the Gilligan sell signal from Feb 23.

So going into today’s OpEx we have  dueling setups…a thrust out of a 1 2 3 Pullback  versus a test of a signal reversal bar on Feb 23.

Remember the Feb 23 reversal from 511 (5111) was a Time/Price square out as 511 squares-out with October 27^th the big low.

Yesterday we showed the Ending Diagonal pattern in IWM.

IWM reversed from an opening up gap leaving a Combo Soup Nazi/Gilligan sell signals.

To recap a Gilligan’s Island sell is a gap up to a new 60 day high with a close at/near session lows.

A Soup Nazi sell is a new 20 day high that reverses to close back below of a swing high within the 20 day lookback with at least a 4 day interval between the two highs (to guard against a continuation versus a test failure).

IWM’s reversal also sports a Time/Price square-out as Feb 29/March 1^st points to 206.50.

In sum, I have a Panic Cycle that hits in the first half of March.

My best guess at this point is that it is a shake -out prior to another high but the shake out could prove to be an air-pocket toward the 50 day moving average.

The 50 day line hasn’t been tested since the surge above it in early November.

Currently the 50 day resides at 4879.

That translates into roughly a 5% correction.

Interestingly the SPX Monthly Swing Chart would turn down/inhale on trade below the Feb low which is 4853.52. This ties closely to the idea of a 5% correction.

If we should get Airpocketism surrounding the big March historic anniversaries that satisfies a 5% correction, a test of the 50 day line and a possible turndown of the monthlies for the first time since the October low, the strong likelihood is that it will define a springboard for a last ditch rally to a major top in the 5330 to 5500 region.

The caveat is if we get that sharp shakeout and turn back up and we only get a 50% or so retrace and rollover, it will setup a waterfall event in Q2.

Conclusion. We have dueling technicals in concert with squealing stocks:

OKTA, AMD, DUOL and DELL screaming to the topside while SNOW, ZS and MARA squeal like stuck pigs.

Will OpEx give us deliverance?