SPX And FSLR

From Monday, April 20 pre-market comments, when we were at the top of the Bearish Wolfe Wave/Bearish Rising Wedge (Red #5 on the chart):

"The proverbial "everyone" seems to be looking at the current Bearish Rising Wedge, which always makes me a bit nervous. LOL. Sometimes, though, "everyone" is right, at least for a time, as we'll see in the next chart."

It turned out that the proverbial "everyone" WAS right, at least for the time that it took to get to the Wolfe Wave target line (#6). Most sources on technical analysis tell us that when a Bearish Rising Wedge breaks down, the target is the bottom of the wedge, which is Red #2 on this chart. Be careful about that, especially when the trend is bullish, which it has been in the SPX off the March low, and MOST especially when the proverbial "everyone" is wanting it. The selloff from the top of the Bearish Wolfe Wave was more shallow than most were expecting or wanting.

From April 28 comments:

"The Bulls would need to show some muscle to blast through SPX 875-877.

Here are two examples of how they could do it:

1. Sell off "some," to Blue Data Point #4, for a Bull Flag (a low that is slightly lower than the 826.83 of April 21, which is Blue Data Point #2). OR...

2. Sell off to a low that is higher than that, for a Symmetrical Triangle, then break out above SPX 875-877. A Symmetrical Triangle is "lower highs" and "higher lows." The trendlines converge (eventually meet up with each other)."

We can see from the pattern in white that the Bulls' pattern of choice to flex some muscle was Example #2, the Symmetrical Triangle. The Bulls broke out of it ahead of The Fed, came back and retested the top of the pattern after The Fed announcement, violated it a bit, then closed the session out above the breakout. As the chart stands, The Bulls are in control.

EDIT (5:29AM): Forgot to post the target. SPX 918.30 is IN PLAY as long the index trades above the top of the Symmetrical Triangle.

For The Bears to turn this chart from Bullish to Neutral, they would need to take the SPX back below the top of the Symmetrical Triangle. To turn it at all bearish, they would need to take out:

1. "The last low," which was 854.60 in the final hour on Tuesday.
2. The bottom of the Symmetrical Triangle pattern (White Trendline #2-#4), which also is a validated trendline. The low at White #4 came ver-ry close to nailing that trendline, but Bulls stepped in and bought it.
3. The 847.12 low, at Data Point #4.

When drawing patterns, I start at a high or a low, or BOTH, if that's appropriate, and in this case, it is.

In the first chart, we started at the Bearish Wolfe Wave #5, and labeled that HIGH White #1. The next low is White #2. The rally from White #2 to White #3 probably is what E-Wavers would call and A-B-C affair. There was an intervening high (A), low (B), and final high (C), which also is White #3. We came down to White #4, (the near-trendline validation), then broke out of the Symmetrical Triangle.

In this chart, we started the labeling of White #1 with a LOW. What have we got? A pretty well-defined Rising Channel. Data Points #5 and #6 didn't qui-ite tag their respective trendlines, but "close enough" to tell us, "Yes, Trendline #1-#3 IS support, and, Yes, Trendline #2-#4 IS resistance."

If the SPX, for example, should break below Trendline #1-#3-#5, that's a victory for The Bears. There's always a chance of a false breakdown, but if it breaks down, gets retested and FAILS, that would be a pretty good indication that we're going down.

At the moment, though, The Bulls have broken out of the Symmetrical Triangle in the first chart and SUCCESSULLY retested the top of the Symmetrical Triangle, so they still are in control.

FSLR was my "go to" stock last week. I played two Ascending Triangles off the intraday charts. Both of those targets got MADE.

In the daily chart, FSLR has formed a QUADRUPLE nested Symmetrical Triangle, meaning that there are four distinct patterns nested within the Big Symmetrical Triangle (pattern in black).

FSLR broke out of the recent Symmetrical Triangle (pattern in green)and is sitting "champing at the bit" for a breakout. I didn't want a position ahead of earnings. No matter how good a chart looks, the technicals always can be trumped by the fundamentals.

In this case, though, it looks like FSLR reported a big beat after the bell, so the stock likely will come out of this QUADRUPLE nested Symmetrical Triangle on a Breakaway Gap. As we've seen so often, nested patterns and multiple patterns can pack some punch when they break out or break down, so the gap up could be a big one. If it isn't, I likely will try to buy FSLR today on a gap fill or at the top of the Symmetrical Triangle, if I can.

Yesterday's high was 156.36, so an open above that would be a Breakaway Gap. In that event, a print of 156.37 would be a gap fill. For the technical breakout of the BIG Symmetrical Triangle (pattern in black), the top of it comes in today, April 30, at 155.393.