Just a very quick post today as my morning has been hijacked by traffic jams and an ill son, though he’s not seriously ill.
I posted a chart on twitter last night showing that the rising wedge that I posted yesterday morning had evolved over the day’s bullish break into a rising channel, and that the pattern formed from the morning low yesterday was a rising wedge, that is now, just after the open, breaking down.
Yesterday’s high may well be retested now but the obvious next significant target is a test of rising channel support, currently at 2037 and likely to be in the 2047 area by the close. As long as that channel support holds then we should be looking good for a retest of the all time highs. If it breaks then the bears may get a shot at reversing yesterday’s bullish break over the daily middle band. SPX 60min chart:
Is there any reason to think that we might see a hard reversal back down here? Not on SPX but the FTSE chart this morning looks seriously toxic. This bearish rising wedge has overthrown and broken down and I’d generally expect to see a topping pattern form that might involve a retest of the highs, and then a retracement that might be as little as 1% but could easily be a full reversal of the almost 10% move up that FTSE has made over the last few days. This has been tricky tape and it’s as well to keep one eye on the exit. FFIH 60min chart:
That was a strong bull break yesterday and bulls have a decent rising channel from the retracement low to work with. As long as that channel holds bulls are in the driving seat here, on a path to a retest of the all time highs. If that channel breaks I would note that once a twice a year or so we will see a daily break back up over the middle band that is then reversed with a strong red candle the next day. That could happen today if the bulls drop the ball so be wary.
