In line with our bullish forward view on USD, behold the very bearish state of the Commercial Hedger positions in the Euro (courtesy of Sentimentrader). Recent historical data speaks for itself. It appears a decline in the Euro is imminent (which, in market terms means ‘relax, it could be a while yet’ 😉 ).
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.
First off, I want to personally applaud the coolest new feature in SlopeCharts, which I announced yesterday, which is the preloading of data. What a joy this is! When I want to look at a watchlist, I just fire up Preload, go off and do something else for a minute or two (like get a fresh Blue Bottle), and go through my charts at lightning speed. The progress bar (below) shows how things are going.
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: