1. THE ISLAND REVERSAL
Island reversal is usually a bottoming reversal pattern especially if it forms after a steep decline. So the pattern has been formed but the bulls got to make sure it stays that way by keeping this gap open which is protecting the 270-level. If the bulls can do that, this is the ultimate signal for hitting the new all-time high and beyond on the S&P 500 in a month or two.
2. THE OSCILLATOR BREAKOUT
Notice, the price-action is still at a vicinity of lower highs, it means we have not, yet, broken above the 280-level. So, technically, we are still in the vicinity of a potential downtrend. However check my RSI oscillator at the bottom of this chart–you can see that the oscillator is, actually, now breaking out above the 3/13 high showing the buying pressure and the momentum which is actually greater than the 3/13 high (which is 280ish in the price).
So let’s recap; while the price-action is still at a vicinity of lower highs the RSI oscillator is actually creating a new highs. This signal often occurs when the momentum changes in the overall perspective from bearish to bullish.
THE MARKET UPDATE
This weekend’s fresh Market Update video where I go through the indices more in depth.
