Very late post today as I’ve had a very bitty day. I’m heading out again as soon as I’ve posted this so I’ll be brief.
I mentioned yesterday morning that yesterday and today were both cycle trend days, meaning that there were 70% odds on each day that either buyers or sellers would dominate that day. Yesterday morning opened strongly for bulls, and then sellers dominated the day from the AM high. Today so far has been the mirror image, with bears opening strong and the rest of the day so far being dominated by buyers.
So what are we likely to see next? Well we are at a short term crossroads here. On a sustained break over the 2097 high the next target is a retest 2116, and I’d expect a retest of 2134 in the next two or three weeks. On a retest of the 2097 high and hard fail, then I’d be looking for a retest of this morning’s low at 2070 and on a sustained break below that, the double top target would be in the 2043 area, slightly below the 50% fib retracement target at 2049.
The first support levels to watch are the 5dma in the 2085 area and the daily middle band in the 2080 area. Those were tested this morning and have obviously held so far. If we see a sustained break below them then the 50 hour MA in the 2068 area becomes a target again, having already in effect held as support this morning. SPX daily chart:
The double top option looks decent on RUT as well, with the addition that a 60min sell signal would fix on RUT which has made a higher high since I did this chart. All bears have to manage is a sustained break below the low this morning, if they can. RUT 15min chart:
Are we going to see more retracement? I’m doubtful. If only because all of the fixed and potential sell signals that I was looking at yesterday morning have made target, and the key support MA in an uptrend on SPX, the 50 hour MA, has been tested and has held with confidence so far.
If bears can break below the 50 hour MA now then we might well see a strong retracement. If they can’t then this is looking higher.
