For me yesterday was possibly the most fun day of the year so far, and had the low of the day just continued down another three ticks on ES to test the globex low at the open on Sunday, would have come close to perfection, as I had a buy order there. It seems fairly obvious, Greece headlines permitting, that SPX is going with my preferred option that I laid out before the open yesterday and both the daily RSI 5 buy signal, and the strengthened 60min buy signal, that I was talking about as possibilities in that post had fixed by the close yesterday.
ES fell hard overnight but the rising wedge that formed from the lows yesterday was obviously topping out by the end of the day. I’m looking for a retrace into one of the main fib retrace targets which are the 38.2% fib at 2068.57, the 50% fib at 2063.88 and the 61.8% fib at 2059.19. On a move significantly below 2059.19 I would be wondering about a possible full test of yesterday’s low. SPX 1min chart:
I was looking for the stronger 60min buy signal and daily RSI 5 buy signal but what surprised me somewhat was that there was also a NYMO buy signal, delivering a very strong daily RSI 5_NYMO buy signal. I’ve talked about these before and these are very reliable signals indeed. No signal is perfect though and the biggest fail in recent years was the one of these that fixed in the powerful rally in early October last year the day before the main decline into the October low started. We do therefore need to see some follow through to confirm this signal, but it’s a strong indication that SPX may indeed make the rally into 2119 that I was talking about yesterday morning. SPX daily chart:
Subject to unexpected gusts of strong wind from Europe today I’m looking for some retracement of yesterday’s move before another move up. I have main resistance in the 2095-2105 area and a break above opens my ideal target at 2119. On the downside a break below yesterday’s low would be a bad sign for bulls and ideally they should hold 2059 today.
