– The market is testing the 2020 lows and the May 5 breakout point. Bulls will try hard to get the market to reverse back up again.
– So far, the bears have reversed yesterday’s follow-through bar, which is disappointing for the bulls.
– It appears a lot of traders who bought the May 5 high scalped out instead of holding for a swing.
– Today’s current bar is also profit-taking from the test of the April 14 bottom of the two-month trading range.
– The bears see the rally up from May 13 as consecutive buy climaxes and see this as a parabolic wedge top. The problem with that argument is that the rally from May 13 is in an 8-bar bull micro channel, increasing the odds of the first reversal being minor.
– Overall, the market will likely reach the April 21 high. What traders do not know is whether the market will go straight up to it. Or, will the market have a deep pullback first. The odds are the market will get a deeper pullback than what traders want before it tests the April 21 high.
