So who cares, whats next......
IMO we are most likely going BACK to retest the main rsi support line, or "back test" the green line which we broke out from. At the angle they are both at, they will intersect "confluence" in approximately 2 weeks. I will not try and guess, only respect the support and resistance lines it has already provided us.
Tomorrow is probably going to be a down day, but that's not something to get bearishly excited about. Why? The probability irregardless is that Fridays (especially the afternoons) have a high trend to be "profit-taking", so tomorrow is likely down in ANY conditions. (that trend is the same in bear weeks, when we go up on Friday)
I was asked about RSI wedge's on yahoo board, and i think the spx weekly chart can be helpful in that explanation, to a pretty good extent.
I love RSI as a trading tool, mostly b/c like any other oscillators it can only range between 0-100. So there is no chasing it all over the place.
They can be used on any time frame:
- a weekly chart should produce moves for a couple WEEKS
- a daily chart for a couple DAYS
- 60 min chart for a couple HOURS
....so on and so on. (THIS is a Key point)
If you look at the SPX weekly and the RSI annotations, you can likely see what i am referring too, as the past buy and sell signals.
We are now at a MAJOR rsi resistance, established from the spx peak of 1576.
- hopefully the past 2 minor SELL signals (pink,blue) are appreciated
- as well as the past minor BUY signal (green)
(those are past wedge breakdowns, or breakouts)
3 touches = a trend, and when that trend is BROKEN (to the up or downside) the moves are very strong.
We also came within 5pts of the 20EMA, something we have not been above on the weekly in 10months. (added resistance, even tho the rsi's mean more to me)
How am I trading the weekly rsi:
and BUYING the Purple line (if/when it comes)
Simply respecting the rsi till it breaks out or breaks down, as in previous annotations.