Band Ride – Day Six

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Friday was the fifth day of the current ride up the daily upper bollinger band. After today the odds of staying with the upper band drop sharply so the odds are better than even that the current band ride will end today or tomorrow, and looking at the last few years, I would give at least even odds that the high made today or tomorrow will be within 15 points of the spring high. SPX daily chart:

140602 SPX Daily Rising Wedge

On Friday SPX at last hit the weekly upper band as well and closed on it. That could rise ten to fifteen points this week and can overthrow intraweek, so there is an effective range this week that could stretch up to 1942 fairly easily and 1950 at a stretch. Further than that in June seems unlikely as primary channel resistance from the 2011 low is in the 1950 area, and I’m expecting that to be very solid resistance. SPX weekly chart:

140602 SPX Weekly Rising Channel BBs MAs

On the 60min chart I have rising wedge resistance (from the 1737 low) in the 1930-2 area. There is also an open pattern target in the 1940 area so we could see an overthrow when rising wedge resistance is hit. I have drawn in a couple of options for that hit. SPX 60min chart:

140602 SPX 60min Rising Wedge and RSI

I have mixed feelings about the RUT chart here. On the one hand it is underperforming badly, and has failed even so far to break the Tuesday morning high. On the other hand though RUT appears to be forming a bull flag, so it’s possible that the real RUT break upwards is still to come, and that might fuel SPX and NDX going higher than I currently expect. I’ll be watching RUT carefully. RUT 60min chart:

140602 RUT 60min Double Bottom Breaking Up

NDX has an open target in the 3875 area, but has reached a possible fail area at the old all time highs. There is some negative 60min RSI divergence and we could see a failure here. NDX 60min chart:

140602 NDX 60min Rising Wedge Broken Up

Whatever NDX does here it’s most likely going to be doing it without much upward pressure from AAPL, which stopped a whisker short of rising channel resistance on Friday and reversed hard there. There may yet be an exact touch of channel resistance at a retest but that notwithstanding I’m not expecting significant further upside from AAPL in the near future and it may well start to retrace hard. AAPL daily chart:

140602 AAPL Daily Rising Channel

A retracement of some kind feels close but I’m hoping to see at least a touch of SPX rising wedge resistance before that happens. When we do see that retracement I’ll be watching the 50 hour MA for support and that closed Friday at 1904.