April Opex Friday (by Springheel Jack)

By -

The possible bear flag on the SPX 15min broke down yesterday, but without much conviction, and with a decent recovery late in the day. There was no positive divergence on the 15min RSI, but if the rally sees the RSI move over the 50 line today then I would stop looking for that divergence as we don't always see it. As with the last move up, no clear trendline formed so it's hard to see any trendline resistance below the 1388 area:

On ES a rising channel or bear flag has formed since the low, and as long as this holds it looks bullish. On a break below soon it would look distinctly bearish. A bear flag ideally shouldn't retrace much more than half of the flagpole, so a move over the current overnight high at 1380.75 would weaken the bear flag scenario. Rising channel support is in the 1373.5 area and there is also still strong support in the 1371.50 area:

Short term I'm leaning bullish, though in the bigger picture these deep overlapping retracements look like part of an overall corrective move which is suggesting new retracement lows after the end of this corrective rally. That isn't the only possible interpretation however, and as I was skimming through various index charts this morning I was struck by a possible IHS forming on the Nasdaq Composite chart below. A rising channel was also established at the low there yesterday. The IHS neckline is at a very clear resistance level and a break over 3060 on COMPQ would look very bullish:

Short term bonds look bearish and EURUSD looks bullish, which is supportive of some equity upside today. On ZB the rising channel broke the other day and since then a bearish broadening ascending wedge has formed, On a break below wedge support at 141'23 the wedge targets the last short term low at 141'03. on a break below 141'03 a double-top target is triggered slightly below the strong support level (and possible H&S neckline) at 140:

I was looking at the falling wedge on EURUSD yesterday, and EURUSD has now broken up from that with conviction. The wedge target is at 1.3365, and a rising channel has also been tentatively established with resistance currently in the 1.3242 area. A rally here on EURUSD obviously fits with my bigger picture USD chart that I've been posting regularly:

Last chart of the day is silver, where I have mixed feelings about the direction for PMs overall. Short term however there is now strong support at 31.20 on an hourly close basis, and a poor quality triangle has formed at the current lows. Declining resistance is in the 31.90 area and a break above would target the strong resistance area at 33 to 33.30. A break above 33.30 would trigger a double-bottom target in the 35.50 area:

The technical picture on equities looks somewhat ambiguous this morning, but has me leaning bullish as long as channel support holds on ES. The stats for today are very bullish with Stock Trader's Almanac saying that Dow has closed up 12 of the last 15 April Opex Fridays.