Rolling Over (by Springheel Jack)

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Just for a change of pace I'll mainly be using futures charts today. Not much to add to yesterday's charts on SPX with a doji at the upper bollinger band on the daily chart, and the rising wedge I showed on the 15min chart has now broken the support trendline as expected. 

Rising support has also broken on the ES 60min chart on strongly negative 60min RSI divergence. If you look at the last couple of months on the chart you can see that these divergences have been a very good signal of a coming reversal:


Much the same on the NQ 60min chart, though on NQ this is a much stronger resistance area. Most of the last two months has been in a well defined trading range and we hit the top of that on Friday. Again the RSI divergence are worth a close look:

On GBPUSD, which I prefer to EURUSD as a gauge of the anti-USD trade, a small H&S has formed and broken down. Don't short USD today and this adds to the short term bearish feel here:

The rising wedge setup I was looking at on oil last week is still very much in play. I am wondering whether a double-top is forming and we might see some more upside there to make it. There is a very nicely defined resistance trendline offering a nice short entry on any hit of that:

Gold is moving up towards a test of the very important 150 DMA at 1642. This was key support from 2008 to 2012 and, as you can see from the chart, has been important since as well. Possible failure there though I'm leaning towards at least a test of declining resistance now just under 1680:

The technical setup is shifting here, subject to the ECB and Germany. If Merkel unlocks the ECB's printing presses then we might see quite a boost to equities and that might well last several months. I'm still doubtful about that happening but it might and the technical picture on bonds and USD particularly is weakening. Last Wednesday I was a medium term bear leaning short term bullish. Today I'm leaning bullish medium term as long as SPX channel support in the 1335 area holds, but I'm leaning short term bearish. 

If we see a reversal and retracement here, which seems likely, then IF we are now in an uptrend I would be looking for strong support at the daily middle bollinger band and 100 DMA around 1360 SPX. If that folds then I'd be looking at channel support in the 1335 area. If that folds then it will be unlikely that we are in a medium term uptrend and I'll switch back to medium term bear mode.

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