Category Archives: Bulls/Bears

Aces and Eights

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SPX and NDX made new all time highs on Friday, and the minimum requirement that we were looking for in the high that is forming here has been met. There is a setup for sharp retracement from here, though it’s very much still in the inflection point still, and I’ll be showing you on the last chart why I think the setup favors the bulls, though it could very much go either way.

On the SPX chart there is now a daily RSI 14 sell signal brewing, with NYMO divergence and SPX close to rising wedge resistance. SPX daily chart:

170108 SPX Daily

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Deceptively Close

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I was saying on Wednesday last week that ES, then six handles under the all time high, was deceptively close to the all time high, and that was because ES was already making heavy weather of getting through to retesting it. Nine days later ES is seven handles under the ATH at the time of writing, and has been kicking round in this area for a couple of days while we are still waiting for that retest.

The pattern setup here for delivering that retest is good, and the falling megaphone that has formed over the last few days is a likely bull flag that should deliver it soon after the break of megaphone resistance, which was tested again on the NFP numbers this morning but again wasn’t broken. A break over 2268 today would be a clear break. It would be nice to see that break today. ES Mar 60min chart:

170106 AM ES Mar 60min

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Still Thinking About That High Retest

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I was expecting a retest of the all time high on SPX last week and while SPX came close, we never saw that retest. The setup we are looking at on equity indices here might lead to that retest over the next day or two, but it’s ambiguous and if we see support breaks today then it may go the other way.

On ES there is an OK looking falling megaphone that would be a bull flag on the bigger picture. The next target within the megaphone would be megaphone resistance, currently in the 2268.50 area, and on a break up we would very likely see a retest of the all time high not much higher. ES Mar 60min chart:

170104 AM ES Mar 60min

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The Times They Are A Changin’

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2017 is likely to be an interesting year, and the tape has already shaken off the December cobwebs and is moving again. On the bigger picture the chart below is how I’m seeing SPX on the monthly chart here, and the key message is that the bull market from the 2009 low here is most likely topping out or has already topped, though that doesn’t mean that SPX will necessarily drop much in 2017. This has been an eight year bull market and if we see the retracement that I’m looking at on the chart below, then we may not see that bear market low until 2020/1. If we see that 50% retracement then that would be a beautiful fibonacci move, and should then set up a very nice long into the next bull market.

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2016 Market Wrap-Up: S&P 500 Index, SPX:VIX Ratio & USD

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This post will outline how the S&P 500 Index and the SPX:VIX Ratio performed throughout 2016 and how they ended the year. It will also take a look at where the US Dollar Futures Index finished up.

S&P 500 Index

The following four charts of the S&P 500 Index will depict how 2016 ended, on a yearly, quarterly, monthly, and weekly basis.

Each candle on Chart #1 represents a period of one year.

After breaking out to all-time highs and above major resistance, the 2016 candle closed near its high, after re-testing last year’s low and the close and open of the 2013 and 2014 candles, respectively. It would appear that, after shaking out short-sellers, the bulls are firmly in control of upward momentum. We’ll see if the Momentum indicator makes a new high on the 2017 candle…a distinct possibility, if price can remain above major support at 2100. If price drops to that level, we’ll see a rise in volatility, and, if price drops and holds below that level, volatility will rise drastically.

Chart #1 SPX Yearly

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Goodbye to 2016

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It’s been an interesting year on equities this year, with plenty of thrills and spills, and with some extremely dull periods where volatility almost vanished. Not the easiest year to trade, but generally something interesting happening, even if that was only a record-challenging period of very little volatility like the one we saw in the summer.

There were some big surprises over the year. the UK voted to leave the EU unexpectedly and the expected equities meltdown that the financial news had been talking about endlessly only lasted a couple of days. Donald Trump won the Presidency unexpectedly, and the expected meltdown that the financial news had been talking about endlessly only lasted a couple of hours. What did this mean? Mainly that watching the financial news is generally a waste of time, but most of us already knew that.

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