Market Extension Post NFLX Earnings

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Yesterday’s report was titled Strength & Weakness due to the internal weakness in breadth and new lows on Monday, while at the same time there was a buy set up in the SMH, the Semiconductor ETF… a Gilligan buy signal, which is a gap down to a new 60 day low with a close/at near session highs.

Several chip stocks like AMD and MRVL along with growth glamour UPST set up for rallies and we used them in the Nightly Hit & Run Report.

Whether the rally was perpetuated by an article exclaiming the Fed lied and QE is alive and well, we don’t pretend to know.

But the market exploded in March in keeping with the Fed’s fingerprints on the printing press.

The Fed Lied… QE Didn’t End… Protect Your Portfolio From Inflation Now!

Be that as it may, while Q’s led Turnaround Tuesday, they satisfied a potential turning point at Tuesday’s high.

Why?

Of course, should QQQ clear and sustain above 347, it opens the door for them to push higher.

90 degrees off Monday’s SPX 4370 low is 4423 and the index ripped through that level, opening the door to the next 90 degree decrement higher, which is 4503 as indicated by the Square of 9 Time & Price Calculator.

Interestingly, 4503 also ties to a 50% retrace of the swing down from the March 29 recovery high.

As well, this ties to a Bowtie of the SPX 200 and 20 day moving averages currently right at 4500.

So this region could well magnetize the SPX higher today. Additionally, trade over Tuesday’s high puts the SPX in the daily Minus One/Plus Two sell position.

This is because the 3 Day Chart is pointing down and 2 consecutive higher daily highs (intraday, not closing necessarily) satisfies the +2 part of this Swing Method.

Notice that the SPX caved in from a Minus One/Plus Two sell position on April 5 as soon as it “assumed the position.”

So, heads up if the index trades above Tuesday’s high (4471.03) and falters… keeping in mind it could extend to kiss the 4500 Maginot Line, which as I’ve stressed for months was a critical level.

Essentially, the SPX has been oscillating up and down from 4500 since it first broke that December low level in the January waterfall.

Half this year's range is 4467, which ties roughly to the aforesaid 4500 level.

As well, 4467 ties closely to Tuesday’s high.

In sum, “putting the pieces together,” despite the post-NFLX swoon, suggests an extension higher: the SPX triggered an hourly Rule of 4 Breakout early Tuesday and came out of an hourly Cup & Handle on the runoff.

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