The decision at the ECB meeting yesterday was a strong indication that the fighting talk from Draghi, Merkel and others last week was just wind, and that there will most likely be no big push from the ECB to start printing money on a large scale, because the Germans won't accept it.
There was a substantial decline on the news which pushed SPX slightly below the 1360 area support zone with the daily middle bollinger band and the 100 DMA, and recovery over 1360 by the close. If we see more downside then main support is in the 1335 area, but as I said on Monday, the 1360 area is the first obvious support area and it may hold:
There was some positive RSI divergence on the 15min chart at the low yesterday, though it wasn't strong. The trendlines are a bit of a mess but I have declining resistance just under 1380 and a move over there would look bullish:
Overnight all yesterday's losses have been recovered. NQ is close to testing strong resistance again in the 2660 area:
On oil a descending triangle is forming. These break down 64% of the time and given the backdrop of the broken rising wedge, the chances are that this one will break down. The target would be in the 80.5 area with a 54% chance of making it. I have a strong support zone in the 84 to 84.5 area that could be an H&S neckline:
Gold broke back down below triangle resistance yesterday on the ECB news and I'm watching triangle support in the 1560 area to see whether last week's break up was a false break before a true break in the other direction. A move below triangle support would look very bearish:
It's hard to know what to say today. On Monday I was expecting a correction to, most likely, the 1360 support area, and we've had a very messy correction since then that bottomed just under 1360. That could be it, and if we see SPX over 1380 today then that most likely was it. Short term though I'm seeing some negative divergence on the ES 15min RSI, and ES and NQ are back in strong resistance zones. Hard to call this today. I've got stuff to do so I think I'll take the rest of the day off. Everyone have a great weekend. 🙂
