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.
Short term rising channel support was broken at the lows on SPX yesterday, and that break was confirmed with another break below this morning. My working assumption is that SPX is now in a topping process for the final move into the swing high that we are looking for here, and it’s possible that swing high was made yesterday, though there are good reasons to think that there is still one more new all time high on SPX that I’ll be looking at on the ES chart. In the meantime SPX is still holding the 50 hour MA, currently at 2392.50, as support and while that remains the case I still like the ATH retest. SPX 60min chart:
ES made a new all time high overnight and SPX has made a very marginal new high this morning. I regularly hear that highs made in globex are always retested in regular trading hours, and that isn’t true, and is demonstrated to be untrue on a regular basis, but these globex highs are retested at least three times out of four, and most likely we’ll see that here.
SPX has a decent rising channel established and rising channel support is in the 2390 area. That’s in the same area as the 50 hour MA, and I’m expecting that to hold until this move enters the topping process. SPX 60min chart:
Another day with not much conviction either way, but the bull flags on ES and NQ have broken up and the odds are good that the SPX all time high will be tested ……. before the heat death of the universe ……. probably. Really dull tape this week though.
SPX 60min chart: