This has been a really strong move up off the early February low, and without enough of a retracement so far to deliver a daily red close on ES. That means that there have now been a very impressive nine consecutive green ES closes off that low. More than nine closes is an impressive rarity, with ten closes in July 2013, eleven closes in March 2010, another eleven closes in November 2006, and then nothing back through to 2000. Will we see another very rare close over the nine today? Perhaps, but these really are very rare. The stats for today lean bearish, with SPX closing down 7 of the last 13 closes on the trading day after President’s Day, though these stats are much less bearish than those for last Friday.
The patterns setups across the indices lean towards retracement here, though without any decisive support trendline breaks as yet. On ES the negative RSI divergence looks very promising and rising support from the low was broken briefly overnight. ES 60min chart:
On SPX the rising channel from the low is still unbroken, and until that breaks any retracement scenarios here are very speculative. I have sketched in a possible path to a 61.8% retracement over the next few days if channel support does break today. SPX 60min chart:
On NDX the setup is a rising channel with an additional possible rising wedge in play. NDX closed the week close to rising support so if we see a breakdown today NDX will most likely break down first. NDX 15min chart:
Dow has formed a nice looking rising wedge from the low and has some space to retrace within that wedge. Negative RSI divergence again looks encouraging. Dow 60min chart:
Will there be a retracement today? I’m leaning towards it but after this spectacularly strong run we’ll have to see whether rising support can break on NDX, then SPX, then Dow. If one breaks then the chances are that they will all break, and then we’ll see how far a retracement can go. I’m on holiday this week but I’ll be doing a post every morning and posting some other charts on twitter.