Looking for Retrace Soon

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I’ve mentioned a few times that the punch over the weekly upper BB on Friday 15th November should deliver a 4% retracement starting soon, and I have a decent looking topping setup right here as it happens. On the SPX 60min chart that is a possible double-top at the high yesterday that would target the 1746 low (and possible H&S neckline) on a break below the last low at 1777.23 SPX. It may not deliver, or we may see another retest of the highs before it delivers, but this is a nice and classical reversal setup after last week’s break below rising wedge support from the 1646 low. It’s worth mentioning as well that 1746 would be an almost perfect 38.2% fib retrace of that move up from 1646. Just sayin ‘. SPX 60min chart:

131126 SPX 60min Patterns from June Low

Looking at ES there is obviously a possibility that we may see a retest of the highs before any short term high is made. If so I’d be looking for reversal there. If the short term high has already been made then I’d be seeing a break below yesterday’s low at 1798.5 ES as confirmation that the short term high is in. ES 60min chart:

131126 ES 60min Trendlines BBs MAs

Looking at the SPX daily chart SPX is still riding the band. If we see a break downwards then first support is at the daily middle bollinger band, currently at 1777, also the trigger level on the possible double-top on the SPX 60min chart above. If ES and SPX break below yesterday’s lows then we may see a fast slide to test that 1777 area support. SPX daily chart:

131126 SPX Daily Patterns BBs MAs

SPX is very extended here, bumping against the upper bollinger bands on the weekly and daily charts, with the weekly upper BB being formidable resistance historically. If we are to see anything other than a slow grind upwards then there will need to be decent retracements to clear overhead room for impulse moves up. We should see such a decent retracement soon, though it may not arrive until the (statistically bearish) week after Thanksgiving.

Just a short post today as I am packing for the holiday weekend. I’m planning to post a couple of charts before the open tomorrow and then I will most likely just be posting charts on twitter until I am back from my long holiday weekend next Wednesday.

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