Yesterday's hourly sell on SPX was good for 13 points, if one covered at yesterday's close. If one held it till today morning's big gap-up, it would have been a breakeven to slighly profitable trade, depending on where one exited. Had they not created that monster gap up, it would have taken quite a while for them to turn the hourly up. The shorts would have sensed the hourlies turning up and start covering thier positions at lower levels, without leaving much fuel for a breakout. On the other hand a huge gap up ensures that the shorts will start covering at higher levels rather than lower levels, causing a breakout.
This is smelling like a false breakout for now. So far the price action has kissed the broken trendline from below. A failure here could mean a retest of yesterday's lows. I would call this another good shorting opportunity with a hard stop around 1273.25. If 1273 is taken out, i would stay away from the short side until another good setup comes up.
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