That was a very nice day on NQ yesterday. I was looking for resistance at the weekly pivot at 5768, and the RTH high was 5764. The target on a fail was 5641 and that was slightly exceeded in globex (buffs fingernails modestly) before the start of the rally that we are seeing today. Does this mean that the seventh seal has been broken and the Bearpocalypse has begun? Um … no, but this swing high may well finally be in, subject to what we see on these rallies/backtests.
On SPX the obvious resistance is the daily middle band (daily closing basis). That’s being tested at the moment. SPX daily chart: (more…)
I’m leading with the NDX and NQ charts this morning as they are driving the equities bus here. I posted my morning video for Daily Video Subscribers at theartofchart.net on twitter before the open and if you missed that you can see that here.
NDX broke back over the daily middle band on Friday and that break needed to be confirmed with another close over that on the next trading day, and NDX failed to deliver that yesterday, which was a bearish development. NDX daily chart:
Well here we are at last. NQ broke over last night’s bull flag and NDX is trying to break over daily middle band resistance. NQ has reached the minimum bull flag target at 5815 and is in the inflection point that I’ve been looking for. On a break up from the inflection point we likely see all time high retests on NDX/NQ and SPX/ES. On the bear scenario here we see likely hard fails back into last week’s lows, and likely continuation down from there. Price must decide which.
SPX has repeatedly held the daily middle band as support and may be starting a move up to a full retest of the all time high. SPX daily chart:
Stan was suggesting in his post market video last night that today might be pretty quiet, and so it was. Lovely two way day for intraday trades and I had a very enjoyable trading day myself calling the move up and then the fail in the final hours, but nothing much happened from a swing trader perspective apart from compression for the next move, in a direction still to be determined.
Nothing of any significance happened on the SPX daily chart. SPX daily chart:
I always enjoy using literary, philosophical or other references in the titles of my posts when I’m not summarising the central theme of the post in it, and this post narrowly escaped being entitled ‘The Curious Incident of the SPX in the Daytime’, before I decided that the central message of this post was too important not to be used as the title. The title would have been a reference to a quote from the famous Sherlock Holmes short story ‘The Silver Blaze’.
The point is of course that while NDX/NQ did almost exactly as I predicted in my post last night, reversing in the right area back to the retest of the daily middle band on NDX, closing a handle below it, SPX/ES and RUT/TF were left at the starting gate, both closing not far above the lows for the day. What does this mean? Well at the least it means that the possible extension higher that I was looking at on SPX/ES if NDX/NQ now breaks up towards the all time high retest is now unlikely, and if NDX/NQ breaks up here then I wouldn’t be looking for more than an all time high retest on SPX/ES, and likely not even that on RUT/TF.
I’ve had a gum infection this week and that has been affecting my sleep patterns and my powers of concentration. Hopefully it will mostly have passed by tomorrow, as it has definitely improved from yesterday to today.
I’m getting a post out before I go to bed tonight though because there is likely to be an important inflection point coming this week, possibly as soon as tomorrow, and everyone should be aware of that.
The short term picture on SPX / ES is that a triangle formed last week and broke up yesterday. I look at that more closely on the ES chart below but the way these generally work is that you see the initial break up (yesterday), then a backtest back into the triangle (today – possibly completed), and then a thrust up to a higher high, at which point we hit the inflection point that I’m looking at this week. When the triangle thrust ends the thrust is usually entirely retraced.
Yesterday’s setup favored the bears on the backtest of a cluster of resistance and fibonacci levels on NDX, today’s lows on SPX and NDX have so far been marginal higher lows against the current retracement lows and that has me wondering about possible triangles forming here.
There is now a very decent looking double top setup on SPX that on a sustained break below 2415.70 would look for 2384/5. That is in a strong support range which I have detailed in the notes on the chart. SPX daily chart: