ADD Hits Extreme: Minor Dip Before New Highs? | SPX Analysis 28 May 2025

Long Weekend Cost Me the Entry, But Not the Edge

Ahoy there, Trader! ‍‍⚓️

It’s Phil…

Some days you catch it. Some days you don’t.

That’s the reality of trading with rules – and Tuesday was a no-cigar kind of day. But after a beach break, a hospital detour, and a futures pop that waited for no one… I’m fine with it.

Trader measuring candle range for pulse bar confirmation


⬇️⬇️⬇️ – keep scrolling for more in-depth analysis – ⬇️⬇️⬇️


SPX Doesn’t Need You To Be Right. Just Consistent.

Pulse bar tells you when. Credit spreads handle the rest.


SPX Market Briefing

We opened Tuesday with a bang, but not a signal.

The first bar of the session clocked in at 5.4% range (I checked). Close enough to raise an eyebrow – but not enough to trigger the pulse bar we needed for entry. So, I watched it move. That’s part of the game.

What’s more interesting is what’s now formed on the daily chart: a picture-perfect island reversal. These are rare and powerful when they play out – a stranded gap-down followed by a gap-up with no overlap. Think of it as the market dropping its bags and turning heel.

This puts 5940-ish on the map for daily swing traders. A push above that could start a proper breakout cascade.

But here’s the twist…

Internals like the ADD (Advance-Decline) are now at bullish extremes. That usually means the rubber band is stretched – so I’m watching for a short-term pullback before the big break.

As of now, I’m flat. No trade, no stress. Let the setup come to me. That’s the benefit of the system – I don’t chase, I just respond.

SPX Analysis 28 May 2025


 

Expert Insights:

Mistake: Jumping in when a setup is “close enough.”
Why it hurts: It breaks the system and invites regret.
AntiVestor fix: If the pulse bar needs 5% and we get 5.4%, we wait. That’s the discipline. And that’s what separates the system trader from the guesser.

Daily island pattern setup and breakout point visual


Rumour Has It…

Sources say Wednesday’s opening bell could feature an unusual ritual: traders lighting island candles and whispering “5940” to their screens. Is this the bullish summoning we’ve been waiting for?

This is entirely made-up satire. Probably!

Breaking scoops courtesy of the Financial Nuts Newswire-because who needs sanity?

Satirical scene of traders summoning 5940 breakout


Fun Fact

The term “island reversal” has nothing to do with palm trees – but it does describe a chart formation so isolated it looks like land in a sea of price gaps. Originally coined in the 1950s, the pattern’s power comes from its emotional impact: a sudden market U-turn that leaves late traders stranded on the wrong side.

Cartoon take on origin of island reversal term

Meme of the Day

“Missed the pulse by 0.4%. System says nope.”

Meme of almost-qualifying pulse bar ruining entry timing


Happy trading,
Phil
Less Brain, More Gain
…and may your trades be smoother than a cashmere codpiece

p.s. There are 3 ways I can help you…

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