The rally that looked very likely to happen yesterday morning never happened, with bears dominating the day and every promising looking start to a rally killed off quickly. How does that look this morning? Well it still looks very promising, but so far today the bears are also dominating the tape. Will there be a rally to set up a right shoulder for a larger H&S on SPX? Well there is a ton of positive divergence here, but the failure yesterday tells us that this market is trending strongly and that may persist through today as well. A strongly trending market (not talking about trend days) can just run over all counter-trend setups and divergence until the market is good and ready to turn. For today a break above the current HOD at 2051.53 would be a promising sign that a decent rally here might be possible.
For what it's worth the rally setup here still looks great, and the current retracement low on SPX is now a lot closer to the ideal neckline on that H&S, which is at 2034. We'll see how that goes today but SPX could just continue down, so any rally would be more interesting for the short entry at the rally high, than this possible long entry at what might or might not be a short term low. We'll see.