I’ve been having a few technical problems this morning with my main computer, and currently have no ability to edit charts at Stockcharts and browser access only to my main broken. I should have these issues fixed later but for now I’ll be using charts I did yesterday and a futures chart for CL.
There are clear bull & bear scenarios here and I’m leaning strongly towards the bear scenario, but with the strong awareness also that there is a huge wild card today in the shape of the Fed at 2pm, so I’m keeping an open mind.
The bull scenario is on the SPX daily chart that I posted on twitter yesterday afternoon, and that is showing that the low yesterday was a decent retest of broken falling wedge resistance from the all time high. If that low holds we would now see a break over range resistance at 2064 and at least a test of the all time high. SPX daily chart:
The rising channel that I showed yesterday morning didn’t survive much past the open. The rally from the AM low was strong, though fitful but I was thinking that things might just e back on track for more upside, though I was concerned that the rally from the lows failed at each of the three retests of broken channel support. I closed the day thinking that the uptrend was fragile, but might just get past 2064 into the highs retest area.
Overnight though ES has fallen hard, and at the time of writing is a clear 25 handles under the close, and well below yesterday’s intraday low, which on SPX is double top with a target in the 2016/7 area on a break below it. SPX 5min chart:
The greek vote was convincingly won by Syriza last night and they are forming a coalition government with a mandate to try to renegotiate the terms of their debt relief package while remaining within the Euro. The news sent ES down hard but that decline has melted away overnight. Was that decline significant?
Looking at the ES chart it’s hard to see that the overnight action was obviously bearish. The rising wedge from the low last week broke down and retraced 38.2%, which is routine in an ongoing uptrend, and the low retested broken falling wedge resistance, which leans bullish. we might see something more bearish happen today, but as it is this chart looks like a long opportunity rather than a short opportunity. ES 60min chart:
On Friday night I posted a quick review of the very bullish setup on SPX at Friday’s close and the full post talking about that was posted yesterday. If you haven’t read that yet you can see that here.
In the short term the possible opening gap over resistance that I was suggesting as likely is looking likely at the time of writing. If that persists into the open then the important thing to remember today is that the bulls most likely own the tape today unless the opening gap fills, in which case we might well see a very strong decline instead, and a new retracement low wouldn’t be unusual. ES 60min chart: