Author Archives: springheel_jack

Testing Rising Wedge Support

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The falling channel broke up on SPX yesterday but held channel resistance on ES and turned back down. SPX is now testing the possible reversal level at rising wedge support from the early November low. At minimum the bounce from there so far confirms and strengthens that support trendline, but this often happens just before a break so we’ll see whether the trendline holds the rest of today. If it does then ES channel resistance is now in the 2369.50 area (approx 2372.75 SPX), and the 50 hour MA is now in the 2370.5 SPX area. SPX 60min chart:

170314 SPX 60min

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A Modest Inflection Point

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I had to redraw it slightly but Friday’s falling channel on SPX has held so far this morning. As this channel is a likely bull flag channel on the bigger picture I’m watching it very carefully. The short term rising support within the channel has broken down and if channel resistance continues to hold then the next obvious target is channel support, currently in the 2349 area. SPX 15min chart:

170313 SPX 15min

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Classic Cliffhangers

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I’ve been re-reading some bestselling tomes from my economics library and was very struck reading the foreword of one at how the same concerns tend to come up again and again. The writer was talking about how world trade was reaching a point of exhaustion, how foreign competition was hollowing out western economies, and how the cycle of boom and bust has reached a point where it seems to have stabilised into a flatline of permanent and chronic depression, that seems likely to extend indefinitely into the future until drastic economic changes are made. Worrying stuff from Friedrich Engels, who was way ahead of most commentators saying the same thing nowadays as he was writing his foreword to the english translation of Karl Marx’s Das Kapital back in 1886. I’m on the edge of my seat to see how it all turns out when Karl Marx gets around to finishing the sequel, which is racing to publication with George R R Martin’s next book in his Game Of Thrones series.

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Stuck In The Middle With NQ

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On Monday morning I gave a twenty handle inflection range on SPX, bracketed by important gaps above and below at the possible breakaway gap above from Friday’s close at 2383.12, and the open gap below from 2263.64. Since then SPX has resolutely stayed within that range, and is almost in the middle of the range at the time of writing. So far, so boring, but time is no friend to the bulls here. If we don’t see a break up towards ATH retests today or possibly tomorrow, then the window of opportunity to see those retests may well be over.

I won’t show the futures charts today but on all of ES, NQ & TF yesterday morning’s falling wedges that had broken up evolved into larger falling wedges, that have now all also broken up. Key resistance is still at the weekly pivots on ES (2379.75) and NQ (5363.25), and conversion of these levels to support opens the ATH retests there. We’ll see, NQ is currently above the weekly pivot there though that’s not the first attempt to convert it.

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A Small Blizzard Of Falling Wedges

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Nice decline on SPX yesterday morning, which didn’t fill the open gap support into 2363.64, and a nice rally in the afternoon, that didn’t fill the open (possibly breakaway) gap resistance into Friday’s close at 2383.12. The opening setup here is 70% bullish falling wedges breaking up on all of SPX, ES, NDX, NQ and RUT, TF. I posted my premarket video that I record every morning for Daily Video Service subscribers at theartofchart.net on my twitter this morning before the open to show the setup, and you can see that video here. SPX 60min chart:

170307 SPX 60min

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Mind The Gaps

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I was saying in our monthly public Chart Chat at theartofchart.net yesterday that the kind of setup we saw at the close on Friday sometimes resulted in an opening gap through support, and we have seen that on SPX this morning. If you’d like to see that the recording is posted on this page here.

This is a potential breakaway gap down and that is potentially very bearish until the gap from Friday’s close at 2383.12 is filled. Below there is strong gap support from 2363.64 and a break below that opens lower targets, with the first of those being the next open gap below just under the possible H&S neckline in the 2352/3 area. The main trendline target now is larger rising wedge support, currently in the 2336 area, but we would usually some a topping pattern for to take SPX lower, and I don’t see one yet. The hourly RSI 14 sell signal is not close to making target. SPX 60min chart:

170306 SPX 60min

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