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I’ve mentioned this pot-growing hydroponic organic gardening supply company called GrowGeneration as a short idea both here and on tastytrade a few times, and it’s definitely heading the right direction. It’s a very clean right triangle top.
I was looking at the tests of the main resistance trendlines on SPX and ES on Monday, and at the possibility that SPX might turn down there. Instead it broke through, dragged upward by tech stocks, and the very nice daily RSI 5 divergence on both SPX and NDX was lost.
On both SPX and ES, price is now slightly above the main resistance trendlines in what may be a bearish overthrow.
SPX daily chart:
I’ve been looking at the resistance trendlines on ES and SPX over my last few posts, and the scenario I was looking at in my post on Friday 6th August that we may be seeing the start of a retracement here that could deliver a 3800 area retest. I was saying that we might well see more highs before that main move started and we’ve seen that.
One resistance trendline that I wasn’t looking at was the rising wedge resistance trendline that has developed over recent weeks and ES is testing that too. Possible daily RSI 5 sell signals are now brewing on ES, SPX and NDX.
ES Sep daily chart:
And so it continues. What does Friday bring?
I was saying in my post last Thursday that if support was found at the levels being tested then, the next target within the rising wedge would be wedge resistance in the 4500 area, and well, here we are.
Now we are back at the daily upper band, and testing a wedge resistance trendline that has already held several times. The chances are that SPX is making another high here, setting up a pattern that can take us lower again than the last decline, so that is what I’ll be looking at today.
In terms of the wedge itself, it is high quality, with an excellent resistance trendline that is unlikely to be broken significantly unless we are going to see a bearish overthrow, not uncommon at a significant high on wedges, or unless the wedge breaks up with a target in the 6800 area which sounds crazy, but really the market went through crazy without a backward glance a while back so it can’t be ruled out altogether.
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