Consolidation (by Springheel Jack)

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SPX closed ten points below the upper bollinger band yesterday. Historically the consolidation or retracement here should last another day or two but looking at the overnight action on ES I’m a bit doubtful about that:


On the SPX 60min chart there is potentially decent negative divergence on the SPX 60min RSI here, but this doesn’t mean anything unless yesterday’s SPX low is taken out to confirm the divergence. Again that’s looking doubtful:

On the SPX 15min chart rising wedge support was broken twice intraday yesterday. That is an indicator of possible weakness soon but there has been no conviction break below this trendline as yet:

What can NDX tell us here? There is very clear negative divergence on the 60min RSI there but the pattern setup looks like a bull flag before a run to test trendline resistance and the September high. There’s nothing convincingly bearish here unless we see a break below 2780:

ES has been testing 1560 overnight, so the very nice looking double-top that formed there over the last two days no longer looks so nice. No short term reason to expect reversal here:

The candidate double-bottom on EURUSD has faded away and EURUSD is now testing the strong support zone around 1.29. If that breaks I have the next big support area around 1.266:

The possible IHS forming on CL is looking better this morning, as the current right shoulder low has reached the ideal area near 92. That is strong support and the IHS neckline is in the 93.5 area. Symmetry is now good on this pattern and if this is going to play out then the break upwards could come anytime:

So far it looks as though the consolidation or retracement period on SPX was consolidation and may already have ended, though historically I was expecting it to last into the end of the week. ES broke below the 50 hour moving average twice in the last two days, but hasn’t held below it and is now back well above it. That may well be back to being support now and is in the 1554 area this morning:

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