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…)
Yesterday’s call for a marginal higher high and rejection worked out ok (buffs fingernails modestly) , even if yesterday afternoon was seriously dull. So now what? Well the first double top target on SPX at 2356/7 has not yet quite been made and that should be tested either this afternoon or tomorrow before we see a likely rally from that area. After that we are looking for a move that should test main double top support at 2322. More details on target areas and support on the charts below. SPX daily chart:
The opening setup today on both SPX and NDX is close to ideal if we are going to see the swing high that Stan and I are expecting to see here. If that’s going to happen, the odds are decent that it will happen at marginal new highs on SPX and NDX today.
On SPX there is now a nicely formed RSI 5 / NYMO sell signal brewing. That will need some downside to fix the signal but I’m expecting that signal to take SPX on the first leg down on this expected multi-month retracement into the summer. SPX daily chart:
This morning we finally saw the ATH retest on SPX that I was looking for on Thursday and Friday last week, and that delivered a(nother) very marginal new ATH that sets a possible daily RSI 5 sell signal brewing. This is a possible nested double tops setup on SPX that I’m watching with great interest. If this is a top setup here however, I wouldn’t expect to see much downside today and the 60min charts may still need another ATH retest to set up negative divergence there. SPX daily chart:
I posted the premarket video that I do every morning for Daily Video Service subscribers at theartofchart.net, on my twitter before the open this morning, and if you’d like to see that the link is here. The futures covered were (in sequence) ES, NQ, TF, DX, CL, NG, GC, ZB, HG, KC, SB, CC & ZW, The forex pairs covered were EURUSD, GBPUSD, USDJPY, AUDUSD, NZDUSD and USDCAD. Particularly pleased with my NG, CC and EURUSD calls today. We’re looking for a major low on CC here and were very encouraged by a very bearish recent article on Cocoa in Barrons, though they are obviously best as a better contrary indicator if the instrument makes the front cover, and their best area of inverse expertise historically is precious metals. Hopefully Gartman will start shorting CC hard to fix the low.
The ideal setup for bulls here would be a retest of yesterday’s lows to make the second low of a double bottom on ES and TF that would then look for a retest of the ATH on both. We haven’t seen that yet and there may be a triangle forming here that will make that a slow process if seen at all. Another option is that the right shoulder is forming on an H&S, in which case SPX will likely kick around the rest of the day and maybe Monday too before breaking down. On this kind of setup the break down, as and when it comes, likely comes with a hard break down through gap support in a breakaway gap that doesn’t fill. SPX 60min chart: (more…)
Apologies for the very late post again today. Wednesday is my biggest charting night of the week at theartofchart.net and I was up until 4am. When I get to my desk every morning I also review and publish charts on currently nineteen different futures and forex pairs with a premarket video looking at any changes of interest on each. Even though I live to chart I tend to get a bit tired on Thursdays.
There’s a running trader’s joke about types of days that can set up in the morning and then play out over the rest of the trading day. It’s like a movie when you watch the first part and you have a pretty good idea how the rest plays out. Some tape movies, such as Buy The Dip movies are very common, but today’s was a rarer variety that I have christened the Vee Movie.