The S&P 500 has been hammering out a "Double Bottom" pattern during the latest bounce, consolidating within a tight 4% range (red box) since March OPEX and now on the 17th day trading within this tight 4% range.

 

On each subsequent test of the 100 MA we are increasing hedge exposure in anticipation of  a re-test near the recent lows of the trading range (red-box) which may suggest a re-test near the 260-257-ish area should price close below the 20 MA.

 

The current technical backdrop in the very short-term is over-bought, a declining 50 MA and earnings season under-way with high expectations may suggest a re-test of the lower portion of the recent trading range.

 

Geopolitical risk in the near term could also weigh on the market as it attempts to recover from the symmetrical triangle breach that occured on March 22 which triggered a sell signal which reduced equity holdings 30% with hedge allocations (put options) increased by 70% on each subsequent test of the 100 MA

 

The short-term market cycle may be suggesting a test near the 2600-2550) level before the next leg higher.