Here is the $SPX equivalent of our longer term bearish setup in ES:





The importance of the current market position is even more visible here, because Friday's high was exactly at the upper ML of the downsloping set at what looks as a possible 3D at the spike line.
If this breaks to the upside than we should witness an acceleration of the upward move, since there is nothing but air above:

Here is this big flat ABCD as I see it:

That's the one, and it's one heck of a setup. If that fails, to me that's a huge clue. And although they may come in like gangbusters any second now, my initial 'feel' is that it may indeed fail.

What do you base this feel on? So far it's a nice reaction off the pattern...

Oh, boy, that's one there isn't an easy answer to. I call it my 'trading gut'. It's a gut feel. I assume it is the subconcious mind distilling many, many factors I am not even consciously aware of. The summation of this is a 'feel' there may be a sea change, in that a bigger intermediate correction may be at hand. Not as big, necessarily, as the April correction, but bigger than the ones that got us near that April top. So, I take that gut feel, and watch how it acts off this key area. If this doesn't send it right to new highs, but instead gives way, then the odds of the gut feel being correct increase in my eyes.

Originally posted by jarek

What do you base this feel on? So far it's a nice reaction off the pattern...

Watch right in here very carefully, and be cautious.

73 area is perhaps the most critical, and likely, area for this to crap out, if indeed it is going to crap out (and, of course, if it gets over the Kane Zone, which it appears about to).

The low end of the area is 72.25, maybe 72.50.

Wow, it doesn't like that area, it seems afraid to even approach it.

That doesn't mean it won't just burst right up and even over it any second now, only that it sure slowed and came in as it got close.

Okay, as I type this, the game is on. Now we see.

Careful in here, folks.

And there's the close, 75.50 was the high. I'd still say that's close enough, it finished a lot closer to my area than any other place it could have finished. And followed the lines almost like a script. Oh, and BTW, that was a positive close for the ES.