It’s Just One Wafer Thin Mint Monsieur

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SPX retested the ATH as expected yesterday, but made a marginal lower high, as did NDX, which I wasn’t expecting. An acceptable double top setup has formed, and if we now see a daily closing break break below the daily middle band, currently at 2178, then this swing high is likely in.

Until we see that though I have a possible and nice looking rising wedge on SPX and the next obvious target would be wedge support in the 2181.75 area (NOW BROKEN SLIGHTLY). That is a possible target for an AM low today and then a marginal new high to set up the second and smaller of nested double top patterns here. SPX 15min chart:

160824 SPX 15min Rising Wedge

On ES the possible wedge support trendline is a little lower in the 2179 (NOW BROKEN SLIGHTLY) area, and that is a match with the weekly pivot support of course, as well as a small H&S target at 78.75 that I called on the subscriber twitter feed for before the close yesterday afternoon (TARGET NOW MADE). ES Sep 60min chart:

160824 ES Sep 60min

The two trendlines have now been broken slightly, but if we are going to see an AM low today then that’s still the obvious place. A reversal there may well deliver a marginal new high on SPX in the 2194-99 range to finally make this swing high before that 4%+ retracement I have been talking about since early August. I have mentioned a few times though that it’s best to be patient waiting for these tops to form and we’ve definitely had to be patient waiting for this one.

This topping setup finally looks almost cooked and ready to serve. The next step is ideally to feed SPX this final wafer thin mint of a high and then watch for rejection at the minimum safe distance. Let’s see how that goes. 🙂