The market delivered another annoying afternoon fade today. This is still a jittery market with lots of headlines to worry about. The market could be in this mode for a while. The good news is the S&P 500 index was able to breach the sloping line of resistance last week (the grey dotted line). Those who have been reading my technical analysis opinions will know I believe sloping lines of resistance to be less significant than horizontal lines of resistance. Sloping lines of resistance rely on the self-fulfilling prophecy: traders expect an outcome so they act on it. Horizontal lines of resistance are more convincing because they have multiple explanations: self-fulfilling prophecy, price anchoring and loss aversion. This is why I wasn't too surprised we easily breached the sloping resistance trend line.

The bad news is we are approaching a potential horizontal line of resistance (the red line). It's not definitive yet because we need another touch point, but it's near the most recent high on 2nd February this year. We could see some friction develop around this area.

If we magnify the last 10 trading days, we can see today's afternoon fade was responsible for the "pinbar" candle. This is usually a short-term reversal signal because the market has rejected the excursion to higher levels. The green candle bodies have also become shorter, suggesting weaker buying pressure as we get to higher levels. In the absence of meaningful positive news, no one should be surprised if the market rolls over and experiences a couple of weak trading days this week. As long as we remain above the rising 50-Day and 200-Day SMA, the market remains based towards a continuation of the uptrend.

Market recoveries are always fragile and never convincing. No one knows when the bear market is over ... until it's over. If you're a long-term investor, stick to your process and keep doing your thing. You will eventually be rewarded for consistency of behaviour.