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Wedges are gonna wedge

SPX Tech analysis by Simon Kazinsky on 11:12 May 02, 2019 EST

The Standard and Poors 500 index has been developing a nice ascending wedge since reaching the 2800 level in mid February.

In technical analysis, wedges -often referred as ending diagonals- are a quite reliable indicator that the prevailing trend is about to end. As momentum fades higher lows and higher highs converge into a narrow area.

The index has retraced from the vortex which is the most likely outcome the textbook prescribes and now trades marginally below the previous top made in late 2018.

If the index does indeed correct then the target exclusively based on this pattern would be at the base of the wedge and, in this particular case, that is in the 2,700 area.