Weekend Trading Notes On May 27, 2012

I am hearing increasingly larger share of market technicians lean toward the idea of selling SPX rallies. It seems that majority of them is now expecting a retest of flat on the year, 1257, to be the launchpad for the next big rally. While I used to agree with that scenario, I am no longer a big fan of it. Stunning similarity on chart below gives me the base for becoming more bullish on SPX. You see, in the beginning of the year I thought that it would not break out of symmetrical triangle until the later part. But now that SPX is backtesting the occurred breakout back to the broken resistance, upper trendline of the triangle is serving as a formidable support, which should result in a bounce to much higher levels. 
As a trader, I would like to reserve the right to change my mind and always trade what I see. Should the price have a daily close below the established low of the current monthly candle, it will give the flat-on-the-year scenario more weight.

click on chart to enlarge