SPX Update: Topping or Breaking Out?

While there certainly could be a top here I think that to call one at this point would be pure speculation and guesswork. Picking a top is not advisable. There is some evidence that we are seeing the acceleration of the bull trend rather than its fading.

The scenario remains unusually bullish. We have an upside breakout of trend resistance on strong volume following a technical failure of two alternate rising wedge formations and RSI having undergone a range shift and breaking a downtrend. Price should either reverse sharply early in the week or see upside acceleration with bear capitulation and sideline money chasing the rally. Note that an upside breakout of a normally bearish ascending wedge pattern is a highly bullish occurrence.

In the latter scenarion I would look for RSI readings of 80 to coincide with the long term bear market downtrend line around 1115-1130 as a target. The breakout could certainly be a bull trap however and a reversal and breakdown of the rising wedge could happen but it would need to happen fairly soon.