This is obviously a very toppy looking setup on SPX and it’s highly likely that SPX is topping out here in the short term, and very possibly making a major bull market top. In terms of timing, topping processes on SPX tend to be slow and my working assumption has been that SPX would kick around until Inauguration at the end of next week, and at that point the decline would get going. I was planning to describe the decline as the ‘Trump Dump’, but I may reconsider doing that depending on any further alleged revelations about the President-Elect’s personal habits in the interim 🙂
SPX may of course not wait that long, as there is a very decent looking double top setup already formed and ready to go to take SPX back to the 2180 area, which might be a good match with rising wedge support by the time it is reached. Rising wedge support is currently in the 2150 area. SPX daily chart:
On the ES chart the triangle I was looking at last night was delivering beautifully until triangle support at 2255 was broken this morning. The triangle could be evolving into a bull flag, but it’s more likely that this is an H&S breaking down with a target in the 2232 area, just above major support in the 2226-8 area. ES Mar 60min chart:
On NQ a perfect double top has formed and broken down with a target at the weekly pivot retest at 4966.25. I called that as likely for Daily Video Service subscribers at theartofchart.net in my NQ chart last night, as well as calling ES to 2255 test and TF back to 1350, as you can see looking back through the comments on the charts. NQ Mar 60min chart:
TF has broken below the triangle at last and the obvious target is in the 1325 area, though there is some support in the 1345 area that hasn’t yet broken at the time of writing and that could hold if the bears fail to follow through on the very trendy action into the lows this morning, though I like the 1325 target better. TF Mar 60min chart:
Any topping process involves a practice run or three as SPX warms up for the turn. My working assumption is that this is one of those. On a sustained break below 2233 SPX that working assumption would likely be wrong.
Apologies for the lack of a post yesterday. I just got swamped in work. It’s been a very busy January so far. It’s going well though. We just updated testimonials on the front page at theartofchart.net & we’re clearly doing something right 🙂