SPX Support Still Holding (by Springheel Jack)

By -

We're definitely seeing some signs that USD may be in the process of making a significant low. I'm a little concerned about that as USD has not reached my target level yet. The initial EURUSD support trendline for this wave up has now turned into resistance and marked the reversal level on Friday:


GBPUSD broke the initial rising channel for this wave up a few days ago, and has formed a shallower rising channel. If this topping process continues then I would expect to see this turn next into a declining channel or H&S pattern. Today I have a target for GBPUSD just under 1.58 for the lower trendline of the current channel:


I was looking at an SPX daily chart on Friday and on that chart the last SPX high looks as though it may have been more significant than I was expecting at the time. There are two big channels, one rising and one falling, and the upper trendlines of both were hit on the same day, with SPX making an intraday high at the top of the rising channel and then closing at the upper trendline of the declining channel. Of the two channels that makes the rising channel look stronger, and if we are to see more upside as many expect then the upper trendline of the rising channel may well be a key resistance level:

101018 SPX Daily Channel Cross

The lower trendline of the SPX rising channel from the August low held on Friday and as long as that holds, I'm expecting more upside as well. Trading has been weak for much of the night and on ES the support trendline was broken on Friday and again last night, but I'm seeing the SPX trading hours support trendline as the important one here, and while that holds the outlook is bullish. That support trendline is at 1169 SPX today:

101018 SPX 60min Rising Channel