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:
Bonds have been in a virtually uninterrupted uptrend since New Year’s Eve on 2013. Looking at interest rates, I wonder to myself if we have turned the corner and are heading into higher rates….
Another day of selling yesterday, and SPX has lost over 2% over the first three trading days of 2015. This is fairly rare, having only happened eight times in the last 44 years, and it puts SPX on the clock for a possible rarer setup that would make the prospects for the remainder of the year look bleak.
Of those eight examples, three managed to close January above the close on that third day, which in this case would be 2002.61. Those three examples all put in excellent years, with the lowest rising 14.75% and the other two rising slightly over 26%. That is the SPX ‘get out of jail free card’ option.
Of the five others that closed January below the close on the third day, the best two full year performances were 1% and 3% gains, the next two lost 10% and 11% on the year, and the last lost an impressive 39% on the year (2008). If January closes below 2002.61, the historical stats would therefore suggest that the likely best case scenario would be a flat year. (more…)
It was refreshing to see the bears deliver a decent decline yesterday, with a clear fail at the retest of the daily middle band. SPX is now into the higher part of my target zone and there is now a very nice falling channel from the highs that should define the retracement. as and when this channel breaks up, this retracement should be over or ending. SPX 60min chart:
Now that the downtrend is more than just the bare minimum I would like to talk about the two main target zones here. I have two target areas within my target range, though I’ll expand that range slightly from 1995-2033 to 1990-2033. (more…)
SPX hit my 1940-5 target range yesterday and at the moment seems to be failing there. That fail looks very bearish but I’ll be assuming that this is a retracement only unless we break through the MA support cluster in the 1970-80 area to open up a possible retest of the 200 DMA at 1920, and then break hard through that on that retest. Until then I will be assuming that we are looking for a retracement before a move to new highs. SPX daily chart: