Category Archives: Patterns

Eye on AAPL Ahead of Earnings

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Since its recovery-rally high at 101 last Thursday, Apple Inc. (AAPL) has given back about 40% of the entire up move off of the 91.50 low on June 27.

Key support resides between 97.00 and 95.50 intraday.  However, with earnings due for release after tonight’s close, my sense is that AAPL risk from either side of current levels around 97.00 is 5% to 6%, or 101-103 on the high side to 93.00- 91.50 on the low side in reaction to tonight’s news.

A spike that takes out the upper end of the range will confirm the completion of an April-July base-like pattern, while a break beneath 93.00-91.50 will point towards a full-fledged retest of the May low at 89.00.

full-V0uJMVklXvr47QH0Zh8LfOriginally published on MPTrader.com.

Follow The Yellow Brick Road

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I never managed to get a post out yesterday in the end as I was preparing for my vacation so I’m doing an early post today before I go using charts I did last night for Basic Chart Service subscribers at theartofchart.net.

SPX inched a little higher yesterday and a possible strong RSI5_NYMO daily sell signal is now brewing. SPX may go a little higher but not much I suspect, and I am expecting that sell signal to fix within a couple of days. After it does I’m expecting a retracement to at minimum test the daily middle band, which closed yesterday at 2111, and likely lower. SPX daily chart:

160720C SPX Daily

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Straining at Gnats

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It has been very dull in the afternoon recently, and sometimes not a lot more interesting in the morning. SPX has been stalled for three days now and a possible double top has formed. It’s very small, and after the great leap upward from 1991, one would think that a retracement of slightly over 1% would be easily accomplished, but it seems that SPX is paralysed into a retracement that so far has been only in time.

If a surviving bear can be located, then an hourly close below double top support at 2155.79, and the 50 hour MA in the same area, then the pattern target would be in the 2142.50 area. First support on a daily close basis is at the 5dma, currently in the 2160 area. SPX daily chart:

160719 SPX Daily 5dma

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Milestones

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SPX and NDX showed the first significant signs of weakness in a couple of weeks on Friday, with breaks below the support trendlines on decently formed rising wedges from the late June lows. Decent quality 60min RSI 14 sell signals have fixed on both SPX and NDX and that’s promising to deliver some retracement soon, though the swing high may not be in, and I’m still waiting for RUT to join the other two with a trendline support break and negative RSI divergence.

Nonetheless, I think all three indices are likely in a short term topping process here, and am looking for topping patterns to form for a decent retracement of 3% or more starting in the next few days. I’m expecting that to be a dip to buy. SPX 60min chart:

160717 SPX 60min

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SPX Daily Upper Band Ride Day 3?

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SPX has had an amazing run the last few days and I understand that this move up from the 1991 low is the strongest thrust up in over 5 years. A move like this is akin to an extended trend day, in that there is no shortage of counter-trend setups, but these all tend to fail until the move is nearing the end. We’ve had some weakness this morning, and an impressive range of 60min sell signals have fixed across the indices, but there is a much higher than usual risk that these won’t deliver a decent retracement. On the bigger picture this move is very likely to need higher, and any retracement here is likely to be a dip to buy.

If SPX manages to push up through the negative price action this morning then SPX has been on a daily upper band ride for the last two days, and if that is to continue today, then I’d expect a touch of the daily upper band at 2164 before the close to maintain the band ride. SPX daily chart:

160713 SPX Daily Band Ride

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Grinding Higher

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SPX pushed through the big resistance levels I was looking at yesterday at the open and has made a new high at 2153.62 so far today. If the bears have a shot today, and that’s a real maybe, then the best scenario has the very well formed rising wedge on ES shown on the first chart below, having overthrown wedge resistance this morning, returning to test wedge support, currently in the 2118 area but rising rapidly of course.

As I haven’t recently reposted here the bonus charts that I post for subscribers at theartofchart.net before the RTH open every morning I’m posting them all today. The usual ones are ES, NQ, TF, DX, CL, GC & ZB and I’m trialling NG as a possible addition. If you want to see these every morning you would need to subscribe to either the Daily Video Service or the Chart Chat Service at theartofchart.net. ES Sep 60min chart:

160712 ES Sep 60min

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