SPY - Bear Flag - WIll it break down today?

The S&P 500 had 4 great days with a 5% move up. The first two days were large green candlesticks with the last two days of consolidation and support creating a bull flag.

The index would appear that it wants to test the previous highs of 1,471.

A long position is right at this time until either the flag channel is broken to the downside or we hit 1,471. A break of the flag pattern to the downside would be a opportunity to go short for the short term. A hit of 1,471 is not necessary a short opportunity but rather a pivot point and we would have to wait and see what the market wants to do.

Quarterly earnings reports start this week and will have an impact on the market sentiment.

The SPY intraday chart shows the bull flag in a bit more detail. A break of the channel to the downside would be a riskier and early short opportunity. A close below 145 would be a confirmed break of the upward channel.