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Bulls had an ok day yesterday, but they’re looking tired here, and this morning has seen the rising wedge trendlines break on both ES and SPX. There is a small double top on SPX targeting 2149 on a break below 2159, and I’m looking for a larger topping pattern to form, so I’m going to be watching the possible H&S neckline in the 2146 area. SPX 60min chart:
Equities have become so godawful annoying, I’ll turn my attention to currencies. In my view, the Euro is a safe bet on the short side right now. Medium-term, it seems to me we’ve broken an important channel on EUR/USD, as we did in the past (see circles below) and the upside risk is much smaller than the downside opportunity.
Last night, when I first learned about the horrible, disgusting tragedy that took place in Nice, I instantly had this thought (which I tweeted out):
Well, these days, I’ve got to say, it feels satisfying to get at least ONE prediction right:
Some of you will rest assured that no charts were involved in my speculative analysis.
The market – if you want to still call it that – can be broken into two camps these days. One camp is completely dominated by the bulls. In short, they’ve won. Trendlines have been broken to the upside, and there is absolutely nothing about the behavior of the charts to suggest anything but a near-endless series of new highs.
The other camp has been recovering, to be sure, but isn’t in the hands of the bulls (yet, at least). The topping patterns are still in place, or at a minimum, there hasn’t been any breakout.
