SPX retested the ATH as expected yesterday, but made a marginal lower high, as did NDX, which I wasn’t expecting. An acceptable double top setup has formed, and if we now see a daily closing break break below the daily middle band, currently at 2178, then this swing high is likely in.
Well, that spiffy little symetric triangle I discovered on gold turns out to be reasonably important. We continue to weaken on gold (and, consequently, miners). Here’s the front month:
Yesterday started off as expected, but the move down stalled at the daily middle band, and then that held on repeated tests for the rest of the day. I was saying last night on the daily video update for subscribers at theartofchart.net that the support there three of the last four days was favoring a retest of the daily upper band at 2194/5 next, and that the possible H&S patterns forming on SPX, NDX & RUT were now much less likely to deliver. On a retest of the ATH, which we are seeing now, then I’d be looking for a marginal new all time high in the 2194-2200 range, that should not break the resistance trendline now at 2200. I would expect that marginal new high to be the swing high for the current move up, and for that to hold for three or four weeks. SPX daily chart:
There’s an interesting setup on the SPX 15min coming into this week, with the possible H&S patterns that I was proposing last Tuesday morning still forming on all of SPX, NDX and RUT, but with a possible alternate falling wedge forming on SPX. Either way the obvious next move would be a test of the H&S neckline / possible falling wedge support in the 2166/7 area. At that point we should either see a fill of the open breakaway gap into 2164.25, or a reversal back up to retest 2193 to make a likely second high of a double top.
All charts from the charts I did at the weekend for the Trader’s Chart Service at theartofchart.net. Further notes on the charts as usual.
SPX 15min chart:
SPX went a bit lower than I was expecting yesterday morning but held breakaway gap support and we have then seen the rally to retest the 50 hour MA from below that I was looking for. That’s holding so far and if that remains the case then on a fill of that breakaway gap support art 2164.25 then I would have an H&S target in the 2142 area, not far below the possible larger H&S neckline in the 2147/8 area. If the candidate island top gap above at 2190.15 fills then I’d expect a marginal new high that should respect trendline resistance slightly under 2200.
I’m using charts that I did yesterday night for subscribers at theartofchart.net. SPX 15min chart:
Here is my watch list for Wed, Aug 17 with 5 stocks ready to continue higher from current levels: American Equity Investment Life Holding Company (AEL), CIT Group Inc. (CIT), Genesee & Wyoming Inc. (GWR), Texas Capital BancShares Inc. (TCBI), McEwen Mining Inc. (MUX).