Category Archives: Interest

Chop Top

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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

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Weak Highs

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The tape didn’t actually move much yesterday, but nonetheless the bears had a very decent technical day. On SPX It looks very much as though the possible falling wedge I posted yesterday morning may be in play, and if so that is very significant, because in this context that would be an EW ending diagonal, a terminating pattern that in turn is the final move within the much larger rising wedge / ending diagonal from the October low. I’m very much liking the odds of putting in the spring high in this area.

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Interest Rate Repulsion

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I thought oil would be my superhero today, considering how things started, but it turns out my TBT short was actually the real winner. Interest rates tagged the descending blue trendline I’ve drawn below, and since then TLT has been firming up smartly. TBT, the double-short ETF based on treasury bonds, has been wilting mightily today, and it may well continue to do so into next week.

0515-tnx

Some Bold Projections

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SPX gapped down hard below the daily middle band yesterday and rallied to close just under the middle band. What I would like to see now is a break back over the middle band, and then a fast move back to the daily upper band to make a marginal new all time high. I’d be looking for the 2015 high at that marginal new high, and would then be looking for a 300+ handle decline to retest the October low at 1820, with a rally on the way to establish an H&S right shoulder at the likely 1972 area neckline.

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Bounce Coming on Bonds ……. Probably

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SPX broke the short term rising channel yesterday as well as the daily middle band. I’m not seeing any strong reason to think that yesterday’s low won’t be retested and if so there is strong support at the last significant low and the weekly middle band, both at 2072. A break and particularly a close below would open up a test of double top support at 2039. Overhead resistance is at the daily middle band at 2096 and bulls really need to get back over and hold over the 50 hour MA at 2108. SPX daily chart:

150501 SPX Daily Patterns BBs MAs

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