Category Archives: Patterns

Two Clear Options Here

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SPX made my double top target yesterday, overshooting by just a few ticks before bouncing hard overnight. There are two clear options here, both ultimately bearish, and we should see which option we will be taking today.

The more bearish and more likely option in my view is a rally backtest of 1950 area resistance. the key resistance levels here are the 50 hour MA at 1944, declining resistance from 2096, currently in the 1955-60 area, and (daily closing basis) the 5 day MA, which closed yesterday at 1960. as long as these can hold as resistance then I’ll be looking for the next move to be the retest of the October low in the 1820 area.

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The Breakaway Gapfill

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I was looking yesterday morning at all the double top setups on my optic run indices and they have all been playing out overnight. It seems highly likely at the time of writing that SPX double top support at 1948.33 and the breakaway gapfill at 1940.51 will both be filled at the open, so Thursday’s very bullish breakaway gap over resistance is killed off and there is now an open double top target at 1903.18 on SPX. SPX 60min chart:

150901SPX 60min Patterns MAs

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Definitely Maybe

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Stan and I were looking carefully at the current setup on SPX in yesterday’s chart chat and you can see the recording of that here. Short term SPX and the rest of my optic run indices are still in the same inflection point that they were in on Friday morning, waiting for a break either way.

If that break is upwards then the very obvious target is the 2030 area, at the retest of broken channel support, the target for the retrace of the triangle from two weeks ago, and not far below the SPX double bottom target at 2041.

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The Badgers Are Still Angry

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I remember a trading bud describing the tape in the strong bear move in 2011 as angry badger tape. We’ve been seeing that again this week and I think we could see yesterday afternoon that the badgers are still angry. If you’re trading this intraday then you really might consider taking today off. If you are swing trading then watch the key levels carefully.

What are the key levels today? There is only one really important one today on SPX and that is the open gap from yesterday morning. That was retested and held in the wild move yesterday afternoon. As long as it holds and bulls make new highs today we should at least test 2000. If that support breaks then the bull case here falls apart and I would draw your attention to the nice looking double top setups on SPX, Dow, TRAN ……….. Scan 3x 15min SPX INDU TRAN charts:

150828 Scan 3x 15min SPX INDU TRAN

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Looking Above

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I am struck by the similarity of almost all the indexes and ETFs I am looking out. Simply stated, the relief rally that I anticipated (exactly one day too soon, it turns out!) is raging away, and we’ve tacked 1300 points – THIRTEEN HUNDRED! – on the Dow in just a few days. The amount we may have left to go varies somewhat from index to index, but I’ve tinted below what I consider the major overhead supply zones for a variety of them. Enjoy!

0827-indu (more…)

Mind The Gaps

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The bears had a try to make a lower low on SPX yesterday and failed into a move up that closed well above the 2SD daily lower band. The bulls have a shot at turning this back up today and on a sustained break over double bottom resistance at 1954.09 the target is the 2041 area. For some reason I called that in the 2050s yesterday but the target would definitely be 2041 area.

I ran the optic run 15min charts yesterday and I’d assess those as being neutral to bullish, with the most bullish chart being RUT. If RUT is leading then bears are in real trouble here. Scan 3x 15min SPX INDU TRAN charts:

150827 Scan 3x 15min SPX INDU TRAN

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Lower Band Bungee Jumping

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Yesterday was a classic lower band ride day with a touch of the 2SD daily lower band, an AM high that failed, and a gap fill and lower low. The obvious target is still the 1820 area and as long as the lower band ride continues then I think we may well make that target today. SPX closed back within the 3SD lower band yesterday, so SPX just missed a record breaking three consecutive closes below that.

For today I’d be looking for an AM high that would ideally test the daily 2SD lower band which closed yesterday at 1927. Any high under Monday’s high at 1954.09 is theoretically acceptable but I’d be getting edgy about the short case on a break over yesterday’s high at 1948.04, and would recommend being very careful with shorts on any break over 1954.09, as that is possible double bottom resistance. SPX daily chart:

150826 SPX Daily Lower Band Ride

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