In our last article for TraderPlanet, I showed you the ascending triangle pattern that was forming on the SPX. We were not sure if the pattern was going to play out or not, but the 2% bullish sentiment reading at the bottom of the pattern, was enough to put that pattern in the front spot as far as potential direction for the SPX.
SENTIMENT READINGS
The Fed leaving the QE program “as is” and not tapering, took many by surprise and it took a matter of hours for the SPX to reach the upside target of the ascending triangle. And like clockwork, it took that last burst higher to send our sentiment indicator to 100% bullish —just as it touched the top trend line.
PRICE TARGETS
One hundred percent bullish readings are rare and something to pay attention to. We have seen the SPX drop some 56 points from the 100% bullish reading and sentiment has come down some, but there is still a little more room before we get into the extreme bearish readings.
If the SPX is going to follow this ascending triangle pattern, we should see it make its way down to the 1659ish area as a minimum target. But if the pattern is going to play out completely, a move down to the 1600 would be more likely.
