Well, it really did seem as though the expected interim top was in
and that the correction was starting on Monday morning. My ES channel
broke downwards overnight and it seemed we were away.
I wasn't too happy from an indicators perspective, as I had expected
a bullish Monday, and Mondays have almost all been bullish in recent
months. In the afternoon after the decline stalled I ran a line
parallel to the channel up from the 1085 low and it fit very well where
we had retraced to on Monday morning.
Looking at it now, it seems clear that the larger channel is the
correct one, so here is the updated ES channel, which has most
definitely not yet been broken:
One of the indicators that I have been looking at carefully is the
bullish percent index $BPNYA. That made some progress today and is
near, or possibly even at, a level which should signal an important
interim top:
I was surprised to see USD push up sharply from Friday's close. I had
found an in-channel H&S pattern on USD indicating to the bottom of
the USD rising channel, and have found those very reliable in the past.
However USD does seem to have turned back up with some conviction now:
There is some good reason to think that USD may have turned back up
now. EURUSD broke through its channel late last week, but that may just
have been an overthrow, it has returned today and may now start another
wave down:
Gold and oil seem to have made interim tops already, which is a good
indicator that we may well see an interim top made on equities soon. Oil has broken
out of its rising wedge and is making good progress down towards the
wedge target in the 72 area:
Gold has also broken out of its rising wedge, but presents a more
intriguing picture as over a longer timeframe we may have a large head
and shoulder top on gold indicating to the 950 area, which is something
to think about.
It may not play out, there was another more recent IHS on gold that didn't
play out, but H&S patterns on gold form often and generally do play
out. There are three smaller ones marked within the large H&S pattern that
all played out:
I think that we're very close to an important interim top now, and I'm
fairly certain we'll see that this week.It is obviously quadruple
witching opex this week though, so we may have some more surprises on
the way.
