NQ was a lot weaker than ES yesterday, and so rather than NQ hitting the lower trendline of the megaphone at 2266 at the same time ES hit wedge support at 1257, it hit while ES was only at the daily 20 SMA at 1267. They both bounced there and now we will start to see the shape that this correction will take by seeing how far the bounce goes. It's still possible that we could see new highs before the correction really gets going, but there's now been so much technical damage elsewhere that I think that's unlikely. On both NQ and ES we now have fully established declining support trendlines. On NQ that trendline is shallower and I'm expecting it to break on the next big move down as the megaphone, or broadening top to give the proper name, breaks downwards. As for bounce targets that's hard to say, but I have a declining resistance trendline in the 2300 area that I'll be watching carefully:
On ES a declining support trendline has been established that will be a buy level on the next big move down. The big rising wedge support trendline was not hit at 1256 yesterday and is unfinished business. Declining resistance for today is in the 1287-8 area. If declining support there is broken then a new high or double-top is still on the table:
Elsewhere on the equity indices the RUT made a nice support break yesterday and has formed another broadening top. Interestingly the target (on IWM) for the broadening top would be the strong support level at 74:
Worldwide there's less damage so far. I always watch EEM as an indicator and there's a very promising looking double top with negative divergence on the weekly chart there. The shorter term support trendline needs to break but when it does it will look like a very attractive short:
EURUSD disregarded my beautiful chart yesterday and went on to make a new high overnight. GBPUSD made a significant support break though and AUDUSD broke a major support trendline, so I'll console myself with the thought that at least EURUSD made that marginal new high with significant negative divergence on the 60min RSI. It should reverse soon I think, but we may see it go higher again while the current equities bounce is ongoing. I've given some thought to the last chart I'll post today, as there are a lot of interesting charts to choose from, but I think I'll have to go with the silver chart, where the H&S neckline and ten week rising channel both broke down yesterday. The target is in the 25 area at a significant support level, and I'm hoping to see a decent bear pattern for the decline so the bottom can be easily identified if it isn't there. I'm a long term silver bull so the low will be a major buying opportunity IMO. It is worth noting however that the 25 level is also a potential neckline for a much larger H&S, and that there is therefore the possibility after a bounce there, of a much larger decline later in the year:
I started off writing this post with the thought that I would combine it with an argument that we have just seen a very major top on commodities, but there were just too many charts to do that. I've therefore written a second post on that subject that I'll publish tonight as a weekend read.