Category Archives: Indicators

Roll On The Weekend

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On SPX this is day three of a daily upper band ride. The upper band is at 2096.92 at the moment and the current intraday high has already tested that. At the time of writing ES has broken over the resistance at the 2092.75 area that has held the last two days, and if that break is sustained I have a working breakout target at 2103.25 that may well be hit. ES Jun 60min chart:

160527 ES Jun 60min

NQ has been trickling up. As with ES and TF there is a fixed 60min sell signal but it’s possible that we won’t see any meaningful retracement until the double bottom target has been hit (target on the chart). NQ Jun 60min chart: (more…)

Rising Wedges Turned Channels

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The bulls delivered a strong confirming daily candle and tested the daily upper band on SPX yesterday. The good news for bears is that 60min sell signals have now fixed on ES, NQ and TF, with all of them looking close to starting a decent retracement. The bad news for bears is that if seen at all, the low on that retracement is most likely a strong buy, as the technical picture has now shifted heavily in favor of the bulls. I’ll explain why below.

I’ll start with the most bear friendly of the daily charts. On RUT the obvious next target is a retest of the current swing high, though the limited retracement seen so far would suggest that retest should be the second high of a double top before a larger retracement. On the TF chart there is an open IHS target at the retest of the current swing high. RUT daily chart: (more…)

Expecting Some Downside

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SPX broke back over the middle band yesterday with some confidence, and I was going to be writing this morning about the bears needing to put in a strong reversal candle today to avoid the daily upper band at 2088 becoming a strong target. As the morning high so far is at 2089 I’ll be skipping that part, and talking about the likely retracement that we should nonetheless see starting today. There is now no reason to think that we would see a strong reversal daily candle today, but nonetheless we should at least see a decent retracement and maybe more.

Where does this leave the indices on the bigger picture? Well as long as the daily middle band holds as support on the retest I think we may be about to see, then the obvious next target on SPX is a retest of the swing high at 2111. I also have an open double bottom target on NQ that I’ll be showing below that will be worth bearing in mind.

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An Inflection Area

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Decent rally on Friday that has failed so far either to make a higher high or to break over the 50 hour MA on SPX, so unless that changes I’d expect the rally to be reversed in the near future, and that may well happen. There is a possible alternate scenario here where SPX might be forming the H&S on a larger and flatter H&S pattern, and if so the ideal high would be a bit higher in the 2075 area. That would be very close to the 61.8% fib retracement of the decline from the highs so far and is obviously still potentially in play. Stan’s bull/bear line is the 2039 ES area (approx 2043/4 SPX) so I’ll be watching that area for possible support this morning.

The short term pattern on SPX is a decent falling channel and channel resistance hasn’t been tested yet. A lower high under Friday’s high could deliver that this morning and we may well see that. SPX 60min chart:

160521 SPX 60min

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Support and Resistance on Opex Friday

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Nice call from Stan on his Wednesday night video when he gave 2024 ES as the support to watch on ES yesterday and, if support was found there, then a likely rally to either the 2041/2 area or a retest of the weekly pivot in the 2053.8 area. I was hoping that ES would just trend down through that support but it was not to be, and ES is currently testing the ES weekly pivot area.

On SPX yesterday was the second day of a possible lower band ride. If that is to continue then the overnight rally needs to be reversed and the daily lower band, currently at 2033 SPX, need to be hit at some point today. Support is there and at the 200dma at 2011. Resistance is at the 5dma at 2050, the 50 hour MA at 2056, the 50dma at 2060 and the daily middle band at 2065. SPX daily chart:

160520 SPX Daily

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The Horse Has Been Led To Water

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Yesterday went broadly as expected. The 60min buy signals I was looking at on ES, NQ and TF did deliver the decent rally I was wondering about.The HOD was a shade under the 50 hour MA resistance at 2063 that I mentioned as first strong resistance, and SPX then returned to a new retracement low and the first break below the H&S neckline, though that wasn’t sustained into the close. So what now?

Well obviously the bears need to follow through into the sustained break below the H&S neckline that would fix the H&S target at 1965 SPX as a high probability target, but leaving that aside, if this H&S is going to play out, then it will most likely play out as a lower band ride on SPX. The daily lower band was tested at the low yesterday, and that lower band ride may therefore have already started. The daily lower band is at 2036 SPX today and if so, that should at least be hit, though what I’d really like to see today is a strong move down to start the real move down towards the SPX H&S target at 1965.

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Rubber Meets Road

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It’s been an interesting and rather spiky journey forming the right shoulder on the SPX H&S that I called as possibility a couple of weeks ago now, but that right shoulder is now fully formed and was testing the neckline at the lows yesterday. On a sustained break below that neckline the H&S target would be in the 1965 area, and for a number of reasons that is a very attractive target and possible low area for this decline from the latest swing high.

There was a lot of positive divergence on the 15min charts at the close last night and we are seeing a rally this morning. The big resistance levels on SPX that I’m watching here in the event that the rally heads higher are the 50 hour MA at 2063, and the daily middle band at 2070. SPX 60min chart:

160518 SPX 60min HS Fully Formed

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