Today was an outside day up, and a close over the 18-day SMA. So, the daily bias - at least temporarily - flipped to up, as the ES daily chart below shows. In the process, the prior downward gap in the SPY cash and ES futures was filled.
But the swing line now has a higher high after a lower low, and therefore a new trend is not in force yet. So "outside day up" guidelines are in place in which the low of an outside-day-up should not be taken out in the next two sessions or it constitutes a trap for the bulls. The daily slow stochastic is not embedded. Neither is it over-bought at this time.
IFF a new all-time high is made it would be possible to say that the contracting diagonal higher is still on the table. It would just be extending with the prior high as (i), and Wednesday's low as (ii). But this is yet to be seen.
We remain calm, patient and flexible.
Have an excellent start to the evening,
TraderJoe
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