SPX rejected from the backtest of the daily middle band yesterday and came close to a retest of last week’s low at the intraday low today. There is a compelling case for seeing that full retest tomorrow as well as a retracement low retest on NQ and that the next important inflection point is there. I’ll be looking at why that is below. SPX daily chart:
On SPX the daily middle band was backtested today and was respected. As long as that remains the case on a daily close basis then last week’s low at 2405.70 should at minimum be retested soon. SPX daily chart:
I trust Slopers had a safe and enjoyable Independence Day. My family watched about seven different shows from our lofty air-conditioned perch, while I played Sousa music through a laptop. It isn’t exactly like being there, but it’s awfully close.
Looking at the markets this pre-market, the ES is doing a whole lot of nothing. I’ve tinted out what I’m hoping is a decent top, with 2412 being a key failure point.
Now that we’ve entered the second half of 2017, I wanted to take a look back at the quarter that just closed. On the whole, it was just another victory for the bulls, who have enjoyed over eight years of uninterrupted central-banking goodness. Indeed, looking at this chart of the NASDAQ Composite, it looks like totally smooth sailing ahead…….
I posted my premarket video on my twitter before the open today as I was going out and wasn’t certain I’d be back before the close and if you missed that you can see that here. What I was talking about on ES here was a high quality falling megaphone that had formed on ES on which pattern resistance had been tested twice overnight. If that continued to hold then the likely retracement targets were either a 50% retracement back to the 2430 area or a move back to megaphone support, hit at lunchtime today at 2408.5 and very possibly bullishly underthrown at the current intraday low at 2402.25. This brings us to another important inflection point.
Well, my power to type words is diminished since the tool for doing that is starting to fail – – for instance, I cannot type the letter that appears after “A” and prior to “C” – – so I’ll visit Fry’s after the close. Anyway, just yesterday morning, I wrote……..”I suspect this third test of the support shown below will be the last. Just one more bit of meaningful bad news will push us lower enough to magically change the role of that line from support into resistance.”
Let’s hope so………
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…)