My daughter is getting braces tomorrow morning and I’m going with her so I’m unlikely to manage to put a post together before the open tomorrow. I’ve given this some thought and decided to do a short post tonight and then if I see anything else worth posting before the open tomorrow I’ll post it on twitter then or, if I get back in enough time before the open, I might manage to put up another short post then, but at the moment I think that’s unlikely.
SPX had a decent day yesterday, closing on the key resistance level at 1861 that I flagged as an important bull/bear level in the morning. That may hold tomorrow, as the stats for the last day of the second quarter are bearish, with Dow showing 33% positive closes over the last twenty years or so and SPX at 38%. I looked at the last ten years of these on SPX in detail and pulled out the following interesting points: (more…)
Since my post of June 8th (wherein I noted that the SPX:VIX ratio had overshot its technical resistance limit, and price and Momentum had reached all-time record highs), price has been fluctuating, primarily above the 150.00 level, currently near-term support, as shown on the following 20-year Weekly ratio chart.
As long as price remains above 150.00 I’d say that buying will re-enter the SPX and push price even higher on this ratio. We’ll see whether Momentum confirms, if such a scenario occurs…and, if it signals support for any sustained buying above resistance at 180.00. (more…)
SPX made my target area at 1965-70 and rejected hard there. A candidate significant high for a 10%+ correction is in place but we’re going to need to see some follow through here first to open up the obvious downside targets for that correction. On the SPX 60min chart the 50 hour MA was broken near the close yesterday and SPX closed below it. I’d like to see that established as resistance today and after that any significant break back above it would be a warning that this retracement might be over. (more…)
On the FOMC stats I was looking at last week, of the four similar instances since the start of 2010, and of the three of those that topped in the next few days, one topped on the Monday afterwards, and the other two topped on the Tuesday. If we are to see that intraday high today my target range is in the 1965-70 area and that would respect resistance on the primary rising channel on my weekly chart below. SPX weekly chart: (more…)
I just wanted to talk for a moment about conviction bulls and bears today. I’m not one to disparage anyone’s religious convictions, but that being said, it is a firm rule that any genuine chartist will consider the price data before forming any conclusions from that data, and those conclusions will always be a matter of relative probabilities, never absolutes. Any chartist who doesn’t do that isn’t a chartist at all. What they are is something between preachers and public entertainers, without either the long term incentives offered by the first, or the amusing antics of the second. There are a couple of quotes that say this better than I can: (more…)
Further to my post of May 22nd, the SPX:VIX ratio has now overshot its limit. As shown on the Weekly ratio chart below, price has now punched above major channel, trendline, Fibonacci, and price resistance and sits at another all-time high. As well, Momentum has advanced to an extreme all-time high level…exceeding even the exuberant levels reached in 2006/07 before the financial crisis.
At the close on Friday there was a clear punch over the weekly upper bollinger band. These are rare, and even rarer when the weekly RSI 14 is over 70, and this is only the tenth such punch in the last twenty years. I’ve had a look at the previous nine to see what they can tell us about what to expect next.
My first observation would be that only three of those were at a short term high, though another five topped out within 2% of the punch level, before making a retracement that went at least back below the punch level and ranged in size from 3% to 21%. The exception was in June 1997 which went into an eight day upper band ride that ran up 80 points before retracing 70 points. This is a fairly bearish history, with one strong exception. (more…)