SPX followed the daily upper bollinger band upwards yesterday, and using my usual practice of counting any close within two points as a close on the band, closed on the band. The band isn’t rising at full speed yet as the 20 DMA is still turning up, but I’m expecting the upper band to close today in the 1830-2 range, and most likely the SPX close today will be within two points of that. SPX daily chart:
On the SPX 60min chart there is now clear negative divergence on the 60min RSI 14, and I am expecting to see some retracement soon, very possibly starting on Thursday or Friday as there is often some retracement between Xmas and New Year. The obvious target for that retracement would be the daily middle bollinger band, currently in the 1798 area but rising of course. SPX 60min chart:
I’ve been watching the TNX chart carefully after the rising wedge there briefly broke down on the Fed announcement last week. The rising wedge has been holding since the recovery just afterwards but there is obviously a possible scenario for a serious meltdown on bond yields here that needs to be borne in mind. TNX 60min chart:
Oil is still testing the neckline on the IHS in what looks like a bull flag forming. I’m expecting this to break up, though I have some resistance in the 101 area that might prevent it making the pattern target in the 106 area. CL daily chart:
I’ll be missing most of today watching the Crib Service at Chester Cathedral. My sons are playing Joseph and the Innkeeper and had to be separated at the dress rehearsal when they started fighting. I suggested that this was adding an interesting new twist to the Christmas story, but my wife disagreed and has been threatening to cancel all Xmas presents if there is a repeat performance of that today. We shall see. Everyone have a great holiday and my next post will most likely be on Friday morning as Boxing Day is a holiday here.