Stan and I were asked an interesting question yesterday, which was whether we had any historical stats for how equities tend to perform on Friday the Thirteenth. We don’t, and I don’t recall ever seeing any. Has anyone seen stats on this? Interesting question and if I ever have some free time I might work some up just out of interest.
I was saying yesterday that the decline was likely a practice run as part of the topping process and well, here we are. Nice technical day yesterday with the ES & NQ declines failing into obvious bull flags. The NQ flag broke up yesterday and made target at the ATH retest overnight. The ES flag has broken up at the open today with a strong target back at the retest of the all time high. That’s so close now that we’ll likely do that today.
Here’s the link to my premarket video for Daily Video Subscribers at theartofchart.net this morning, also covering DX, CL, NG, GC & ZB of course. We’ve been nailing pretty much everything except GC this week, though Stan had a better handle on that than I did. I pretty much redrew my GC chart from scratch yesterday night & think I have a good handle on that now. We’ll see in the next day or two whether I’m right about that. If you’re interested in trying the services we offer there is a two week free trial available on this page here. That covers all our services except the Big Five Service covering AAPL, AMZN, FB, NFLX & TSLA. (more…)
This is obviously a very toppy looking setup on SPX and it’s highly likely that SPX is topping out here in the short term, and very possibly making a major bull market top. In terms of timing, topping processes on SPX tend to be slow and my working assumption has been that SPX would kick around until Inauguration at the end of next week, and at that point the decline would get going. I was planning to describe the decline as the ‘Trump Dump’, but I may reconsider doing that depending on any further alleged revelations about the President-Elect’s personal habits in the interim
SPX may of course not wait that long, as there is a very decent looking double top setup already formed and ready to go to take SPX back to the 2180 area, which might be a good match with rising wedge support by the time it is reached. Rising wedge support is currently in the 2150 area. SPX daily chart:
The very nicely formed falling wedge on TF has broken up. Triangle support and the monthly pivot were broken slightly overnight, and Stan & I were looking at that last night and felt that a marginal break, like the one seen overnight, wouldn’t invalidate the bull scenario. If TF can get back over the weekly pivot at 1368.5 and convert that to support, the obvious next target is the all time high retest. TF Mar 60min chart:
SPX and NDX made new all time highs on Friday, and the minimum requirement that we were looking for in the high that is forming here has been met. There is a setup for sharp retracement from here, though it’s very much still in the inflection point still, and I’ll be showing you on the last chart why I think the setup favors the bulls, though it could very much go either way.
On the SPX chart there is now a daily RSI 14 sell signal brewing, with NYMO divergence and SPX close to rising wedge resistance. SPX daily chart:
I’m delighted to say IWM is by far my biggest short.
I was saying on Wednesday last week that ES, then six handles under the all time high, was deceptively close to the all time high, and that was because ES was already making heavy weather of getting through to retesting it. Nine days later ES is seven handles under the ATH at the time of writing, and has been kicking round in this area for a couple of days while we are still waiting for that retest.
The pattern setup here for delivering that retest is good, and the falling megaphone that has formed over the last few days is a likely bull flag that should deliver it soon after the break of megaphone resistance, which was tested again on the NFP numbers this morning but again wasn’t broken. A break over 2268 today would be a clear break. It would be nice to see that break today. ES Mar 60min chart: