A daily RSI5 / NYMO sell signal fixed at the close on Friday, and this is a very high performance sell signal. I think the hit rate for this signal is 75%+ and I haven’t updated the statistics today as the last six RSI5/NYMO buy or sell signals on the chart below all made target (the 30 level on the daily RSI 5), so the stats certainly aren’t getting worse. This daily sell signal joins the 60min and 15min sell signals still open from last week. SPX daily chart:
I’ve been doing more work on the series of bearish reversal candles over the last twenty years and have combed through 90% or so of the intervening period. I’ll finish that at the weekend and may do a dedicated post on these. The ones I have found so far are:
1999 Feb – From 2nd candle into 5% decline
2002 Dec – From 2nd candle into 17.3% decline
2004 Dec – From 2nd candle into 4.46% decline, then marginal higher high, then 7.56% decline
2005 Oct – From 2nd candle into 2.08% decline
2005 Nov – Failed and resumed uptrend into December interim high
2005 Dec – From 2nd candle into 4.44% decline
2007 Oct – From 3rd candle into 57.4% decline
2014 May – From 2nd candle into 1.66% decline
2014 Sept – From 2nd candle into 1.65% decline, then marginal higher high, then 9.83% decline
2015 May – To be determined
There’s not a great deal to add on SPX today. Bulls failed to recover over the daily middle band yesterday but did establish a three touch rising support trendline from the 2067 low. This is a springboard to attempt the marginal new high that I’m looking for here in the next trading days and the big gap up is a promising start to that. On a break below that rising support trendline the chances are that both the short term and 2015 high would already have been made. SPX 5min chart:
Watching the EUR/USD zoom higher is just a heartbreaker, because this was one of the great contrarian plays of the past several years. The EUR/USD was hated by one and all, and parity seemed like a foregone conclusion. But, as always, just when things seemed bleakest, it began a powerful reversal, and frankly, it could keep pushing higher for months at this point. All this “grexit” angst was a tempest in a teapot. Whoosh!
Feel like a really contrarian play? How about going long the Japanese Yen? Yes, the idea of buying the rapidly-expanding currency of a country already one quadrillion yen in debt seems lunatic, but relative to the US dollar, I think the Yen might be in for a surprising rally. The FXY is one way I know of owning the currency.
The markets haven’t been behaving quite as I expected the last couple of days, and I’m wondering whether the spring high might already be in. If so we might well find that out today.
Bulls want to get this back over the 50 hour MA into the next move up, either directly from here or ideally from a test of rising channel support, now in the 2088-90 area. If they can’t hold that support then the uptrend is called into very serious question. Triangle support is now in the 2060 area but main support is at the double top support low at 2039.69. On a break below the spring high was most likely made at 2125.92. Until we see a break below rising channel support at 2088-90 though, the bulls still have the technical edge here. SPX 60min chart: