SPX resolved higher yesterday and the cycle trend day delivered a unidirectional day dominated by the bulls, though not making any new speed records of course. Today is the other cycle trend day this week but as yesterday’s cycle trend day delivered, that less likely to deliver today, and the day has been a two way trade so far.
SPX delivered strong closing breaks above the important resistance levels yesterday and at the time of writing they are the 5dma at 2379-80, the 50 hour MA at 2387/8, and the daily middle band at 2390.
The three levels that I was watching on Friday for resistance on SPX were all tested and held. The lowest of those levels are the 5dma, currently at 2379/80. That was broken intraday but SPX returned to close on it. The next level is the 50 hour MA, currently at 2385/6, and then the daily middle band, currently at 2389/90. SPX is currently over all three but needs to sustain the breaks to open the retest of the all time high.
The pattern setup leans bearish and hourly sell signals are now brewing on all of SPX, ES, NQ and TF. If bears can break back below the ES monthly pivot at 2366 then we’ll be expecting lower lows with an obvious next target at possible double top support at 2322 SPX. (more…)
It has now been exactly 10 months since we established 2410 as the measured objective for the S&P 500. In forming a potential double top this week at 2405.77 I’d say we are close enough to call the target in (as we did in February when the first top was made on what we called “peak Trump” day, post-congressional address).
Now, a target is not a stop sign; in this case it was a long-term objective based on a chart pattern, period. It could make me look like the genius I certainly am not, or it could just pause at the target on its way to further upside mania and a potential market blow off. Don’t let ’em baffle you with bullshit, nobody knows which of those, or whatever else may be in store. (more…)
I was saying yesterday that my preferred target for this rally would be a backtest of the daily middle band on SPX. That’s now at 2388.50 and the high today at the time of writing is at 2384.41, so obviously SPX is now in the backtest area. The 60min buy signals on the SPX, ES, NQ & TF charts have now all made target and this is an obvious inflection point. On a reversal back down here the next target on SPX is larger double top support at 2322. On a break above with confidence the obvious next target would be a retest of the ATH and likely marginal new ATH.
Are there reasons to think that bulls may drive SPX through resistance here? Yes there are. Firstly the action so far on SPX/ES is very trendy so far, and I have valid IHS patterns on ES, NQ & TF that are all pointing higher, though in the case of ES that’s only marginally higher to the weekly pivot at 2390.50. (more…)
The wonderful but all-too-brief drop we had this week has had, in retrospect, an absolutely perfect bounce. What’s remarkable – – and I want to stress this – – is that the trendlines I’m about to show were drawn well before the drop even took place.
So first there’s the ES………..
SPX made the initial double top target at 2356/7 and the rally I was expecting from the target area is in progress. The obvious fib retrace targets are the 50% at 2379 and the 61.8% at 2385.50 and the 61.8% is a strong match with the ideal backtest target on the daily chart at the daily middle band, currently at 2386/7. SPX daily chart:
Further to yesterday’s post, the SPX has filled one prior gap up (in between the blue lines) and is currently filling a second (in between the red lines) (both made in the latter part of April), as shown on the following Daily chart.
At the moment, near-term support sits somewhere around 2320 (price support) to 2338 (external Fibonacci support shown in yesterday’s chart).
A drop and hold below 2320 could see a swift plunge to 2250, or lower and may be influenced by a major change in market perception of Washington’s ability (or inability) to function and produce any meaningful progress on the kinds of economic stimulus programs, tax cuts and reforms, etc., as promised by politicians during last year’s election and, on which, market players were counting, as they invested heavily from that time…particularly, as the Fed reduces its monetary stimulus measures and continues raising interest rates. (more…)