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The SPX has been confined to a congestion for the past 20 odd trading sessions, forming what chartist like to call a rising wedge. Sudden big up day followed by big down day is typical during periods of consolidation. The big question is what will

result from this type of consolidation? Well, the rising wedge has long been recognized as a continuation chart pattern. Since the longer term trend is down, the more likely tendency is a break to the downside. Yesterday, SPX recorded a low of 1274 which touched the lower trendline of the rising wedge. A close below 1274 would violate the wedge and will likely bring the SPX lower towards the July low.

Today is the last trading day for our expiring option spread. Feels like pay day to me. Both our Bear Call and Bull Put spreads should safely cross the finish line, barring something catastrophic. But do remember, while we can trade the spreads the whole of today, whether any August options go in-the-money or not depends on Friday’s open.

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