There is a very strong rally setup coming into today, so I’ve decided to do an AM post this time, with the video below being the section on indices from my premarket video this morning.
The rally setup is the breaks up from bull flags on SPX, NDX and RUT yesterday afternoon and this morning, and the double bottom on SPX that needs to break and convert double bottom resistance at 2683 to fix a double bottom target in the 2705-8 area. If that delivers then all three have a decent shot at a retest of last week’s rally highs. Premarket Video from theartofchart.net – Update on ES, NQ and TF:
Well SPX has finally retraced over the last couple of days, and the bull/bear line that I’m talking about on the video is rising support from the April low. That was tested as expected not long after I recorded the video and that’s holding so far. On a break below this rally has likely ended unexpectedly early. If it holds then SPX should do another leg up into the 2730s and triangle resistance there. I’m leaning towards another leg up unless that trendline support breaks. We shall see. Intraday Video from theartofchart.net – Update on ES, NQ and TF:
I was saying last week that a fill of the open gap from 2711.93, I’d be disregarding the Three Day Rule target (a retest of 2553.80). The Three Day Rule target technically hasn’t failed yet, but the first downside scenario is likely failing, and we are now left with the remaining two scenarios.
The secondary scenario is that a large triangle is forming here, and that SPX is heading towards triangle resistance, currently in the 2745 area. As triangles are to an extent a ‘Get Out Of Jail Free’ card for pattern targets, on a fail there we would likely still reach the Three Day Rule target, and I’d add this to the other two exceptions when the rule triggered while a triangle was forming.
If we do see this scenario develop then as SPX moves to triangle resistance NDX and RUT may reach their IHS targets in the 6945 and 1608 areas respectively. (more…)
Stan and I are doing our monthly free public webinar on the Big Five and Sectors after the close tonight and we’ll be looking at AMZN, AAPL, FB, NFLX, TSLA, IBB, IYR, XLE, XLF, XLK and XRT. If you’d like to attend you can register for that on our April Free Webinars page. We are also of course doing our monthly free public Chart Chat on Sunday and you can register for that on the same page.
The possible triangle resistance on SPX broke and ES and SPX have both broken their respective IHS trendlines at the highs today, so all of ES/SPX, NQ/NDX and TF/RUT have now broken up from their IHS necklines. This is the inflection point I was looking at in Chart Chat on Sunday and if this is going to be a Janus bear flag reversal, then I’d expect a failure here or not too much higher. If the IHSes are for real then the respective targets on SPX/NDX and RUT would be in the 2792, 6920 and 108 areas respectively. I’ll be taking the bull targets seriously if SPX reaches 2712. Intraday Video from theartofchart.net – Update on ES, NQ and TF: (more…)
NQ/NDX and RUT/TF have now both reached their respective IHS necklines and broken slightly over them, so the possible Janus bear flag setups on both are set up and ready to fail into the retests of the previous lows. ES/SPX is the only laggard, but of course there was already a strong target at the last low there. In the video below I’m saying that ES/SPX may have topped out on this move yesterday. We’ll see.
I was asked a couple of questions about a fuller explanation of Janus flags yesterday and they are a pattern of mine so they aren’t written up formally anywhere yet. I tweeted a good recent example on CL and more explanation on my twitter this morning, so you can see that there if you want. Intraday Video from theartofchart.net – Update on ES, NQ and TF: (more…)
Stan and I are doing our monthly free public Chart Chat on Sunday, and on Thursday after the close will be doing our monthly free public review of the Big Five and Sectors. If you’d like to register for either or both you can do that on our April Free Webinars page.
In our Sunday Chart Chat I was looking at an attractive scenario for this week where ES/SPX would make a higher high this week to complete a possible IHS forming, break up slightly from that and then fail back into a minimum target at last week’s low at 2553.80, also the target on the Three Day Rule triggered by Friday’s clear break back below the 5dma on SPX.
What is a Janus Flag? It is a bull or bear flag that looks like a reversal pattern forming, breaks up (or down) and then rejects hard into a retest of the previous low (or high). (more…)
It”s been a while since we last saw an example, but one of my strongest historical stats is the Three Day Rule. On this stat, there first needs to be a 2%+ decline, and then on a break back over the 5 day MA, currently at 2627, then on a clear daily closing break back below on either of the next two trading days, then there should be a retest of the previous low (2553.80), before any significant move over the previous high (currently 2672.08). There are no guarantees in trading or analysis, but with the exception of two very marginal higher lows when triangles were forming, this stat has delivered in every instance (so far) going back to the start of 2007.
Unusually I am posting one of our premarket videos for subscribers, but I have a very busy afternoon lined up, and I’m aware I haven’t published much this week. This is the full video covering all 19 futures that I look at in the morning. Worth mentioning as well that I may well be away on Monday. Full Pre-Market Video from theartofchart.net – Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD: (more…)