SPX fell hard on Friday, made the smaller double top target and broke down from the larger double top. Shortly after the LOD SPX broke up from a falling wedge that I called on twitter, and closed the day at a retest of broken larger double bottom support. The retracement low may be in, and if we are to see a fail without another test of triangle resistance in the 2011 area then I’ll be looking for resistance at the 50% and 61.8% retracements on the falling wedge, in the 2092 and 2096.5 areas respectively. The 50 hour MA closed Friday at 2096 and is key resistance today. SPX 15min chart:
It’s Sunday evening as I’m typing this, but I wanted to let you know that I’ll be pretty much out of pocket on Monday, as I’m still on the road. Things will return to normal (such as it is) Tuesday morning. As always, guest posts are welcome.
The one comment I’ll make right now is one of relief: the ES (as of this writing, obviously) is up 7 points, which isn’t that terribly considering the latest weekend “central bank shock to help the bulls” (this time, from China) is yielding a relatively muted response. It also makes abundant sense that we’re getting a bounce since, as I alluded to on the video, we were badly oversold on Friday’s wild session.
SPX set up a small double top yesterday and has fallen hard overnight. It seems obvious that we are now in the final wave E of this triangle, and there is a clear path back to triangle support in the 2050-55 area if bears can manage it. Support and trigger levels are clear so let’s see what happens today.
The first level of support is yesterday’s low at 2100, and the break of that at the open targets 2088. That opens up a test of Tuesday’s low at 2083.24, and that is the key level today as it is double top support, targeting 2054.57 on a break below it, and the 50 DMA and daily middle band are also both at 2084. This is a very strong support level and it may hold. SPX 15min chart:
SPX tested triangle resistance yesterday and didn’t break through it. There is a possible setup here for a reversal back into triangle support in the 2055 area and that’s shown on the chart below that I posted on twitter last night. We’ll see how today goes, but if triangle resistance holds again today then we will most likely see at least a test of Tuesday’s low at 2083.24. SPX 15min chart:
SPX found support just at the 50 hour MA yesterday and bounced from there into the close, though not with great conviction. I posted the chart below on twitter last night noting the rising channel that had been established, and that as long as that channel held this morning then the next obvious target is now a retest of the all time high at 2119.59. SPX 15min chart: