Author Archives: springheel_jack

Still Thinking About That High Retest

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I was expecting a retest of the all time high on SPX last week and while SPX came close, we never saw that retest. The setup we are looking at on equity indices here might lead to that retest over the next day or two, but it’s ambiguous and if we see support breaks today then it may go the other way.

On ES there is an OK looking falling megaphone that would be a bull flag on the bigger picture. The next target within the megaphone would be megaphone resistance, currently in the 2268.50 area, and on a break up we would very likely see a retest of the all time high not much higher. ES Mar 60min chart:

170104 AM ES Mar 60min

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The Times They Are A Changin’

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2017 is likely to be an interesting year, and the tape has already shaken off the December cobwebs and is moving again. On the bigger picture the chart below is how I’m seeing SPX on the monthly chart here, and the key message is that the bull market from the 2009 low here is most likely topping out or has already topped, though that doesn’t mean that SPX will necessarily drop much in 2017. This has been an eight year bull market and if we see the retracement that I’m looking at on the chart below, then we may not see that bear market low until 2020/1. If we see that 50% retracement then that would be a beautiful fibonacci move, and should then set up a very nice long into the next bull market.

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Goodbye to 2016

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It’s been an interesting year on equities this year, with plenty of thrills and spills, and with some extremely dull periods where volatility almost vanished. Not the easiest year to trade, but generally something interesting happening, even if that was only a record-challenging period of very little volatility like the one we saw in the summer.

There were some big surprises over the year. the UK voted to leave the EU unexpectedly and the expected equities meltdown that the financial news had been talking about endlessly only lasted a couple of days. Donald Trump won the Presidency unexpectedly, and the expected meltdown that the financial news had been talking about endlessly only lasted a couple of hours. What did this mean? Mainly that watching the financial news is generally a waste of time, but most of us already knew that.

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The Low Before The High

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Just when you think the tape has gone into a persistent vegetative state it can sometimes surprise you, and ES did that yesterday with an unexpected trend down day. This is good news from a technical perspective as there is usually a spike down shortly before a significant high, and I was thinking that ES most likely didn’t have the juice to manage that this week. We call this the low before the high, and, if this is that move, then we are looking for a low shortly into a retest of the all time high and likely marginal new high. If that marginal new high can be managed this week then the first day of 2017 may be the start of a significant decline.

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Low Volume Yawnfest?

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The tape has been impressively dull, particularly in the afternoons, but everything is still on track, just moving really slowly.

ES has established good support at the weekly pivot at 2260 and the next obvious move is a retest of the high. If that doesn’t happen in the first 90 minutes today though then locating a buyer and a seller to keep the tape moving might be a problem, judging from yesterday’s action at least. The ATH is only six handles away at the time of writing, but on the tape we saw yesterday I’d describe that as deceptively close. ES Mar 60min chart:

161228 AM ES Mar 60min

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Twas (The Day Before) The Day Before Christmas and ….

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My expectations for the tape today aren’t high. Volume will be low and we may not see much of interest on any markets before next week. Indices might avoid the vague upward drift we see on days like this so often, but it’s unlikely there will be much in the way of nice intraday setups, and if you’ve been waiting for a low interest day to catch up on other work you’re a bit behind on, paperwork, or even just spend some quality hours watching paint dry, then this might be a good day to do that.

Still, here we are, and I did a premarket video today that I posted on my twitter at the open. If you missed that then you can see that here. If the tape doesn’t do the holiday drift up or just stop moving altogether, I’m leaning modestly bearish as long TF stays under the weekly pivot at 1370.50.

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