The rally from Monday’s low has proved to have some legs, and came close to retesting the H&S neckline yesterday. At the high yesterday a perfect bear flag rising channel was established and my lean here is that the H&S neckline at 1872 is likely to be respected on any retest, and that the obvious next significant move should be down. SPX 60min chart:
As ever it’s possible this might go the other way of course and there is a possible double bottom alternative on the ES chart that would target the 1892 ES (1897 SPX) area on a clear break back over the H&S neckline at 1872 SPX. At the moment I’m seeing that as a possibility rather than a probability though. ES Mar 60min chart:
Today is the last of the three cycle trend days this week. Yesterday was an inside day in the end and my lean today is to see continuation downwards. If this goes the other way instead the first sign will be a break back over the H&S neckline at 1872. If we are to see continuation down today then I’ll be looking for an AM high that fails.
