Topping is a Process (by Springheel Jack)

By -

I think equities may well fall today, but if that isn't the case, the anchor for the close today is the weekly upper bollinger band on SPX, and that is now at 1534. If we are to see a close hugging this band for yet another week, I'd expect the close today to be in the 1526-34 area, ideally near 1530:

There are some signs of weakness today. There may be an H&S forming on the 60min chart, though that is very tentative until we see the head completed by a move to test 1496 SPX area support. As RSI has not reached overbought since the last significant low there is no RSI sell signal here:

NDX is testing the last significant resistance level before it can retest the 2012 highs. This is an obvious level to pause or retrace in this very tentative advance on NDX since the November low:

I was mentioning the other day that the setup on TLT was looking increasingly like bottoming action. The advance then broke down to retest the lows but the lows held, and there is now a strong candidate double-bottom targeting 119.65 on a break over 117.6. This may well be a signal that a retracement on equities is close:

I mentioned yesterday that both the bull and bear patterns on CL strongly suggested a retest of 95 area support. 97 has now been broken with confidence so I'm looking for that soon. On a break below 95 the double-top target would be at 92. On a strong bounce at 95 rectangle resistance is back at 98, and on a clear break over 98 the rectangle target is at 101:

EURUSD is holding 1.33 so far and the bottoming setup I was talking about yesterday is stronger this morning. The smaller double-bottom targets 1.35 on a break over 1.34, and the larger double-bottom targets the highs in the 1.37 area on a clear break over 1.35:

I very much like this bottoming setup on EURUSD, but it's worth adding that neither of the obvious rising support trendline targets has yet been hit, and that the higher of those is just below in the 1.327 area:

On the overall picture I think SPX is topping out for a decent retracement before the final push up in this move that will take us into March/April. Topping is a process though and there is no strong sign that interim top is already in. If we see a push up today, then SPX resistance is in the 1530-35 range, support is in the 1515 area, with the main target on a break below 1515 in the 1496 area.

Do NOT follow this link or you will be banned from the site!