Short term rising channel support was broken at the lows on SPX yesterday, and that break was confirmed with another break below this morning. My working assumption is that SPX is now in a topping process for the final move into the swing high that we are looking for here, and it’s possible that swing high was made yesterday, though there are good reasons to think that there is still one more new all time high on SPX that I’ll be looking at on the ES chart. In the meantime SPX is still holding the 50 hour MA, currently at 2392.50, as support and while that remains the case I still like the ATH retest. SPX 60min chart:
If we do see an extension downwards before that high retest, and the 50 hour MA converts to resistance, then we could see a test of the daily middle band, currently in the 2374 area. However that is very much the alternate scenario unless we see that break below the 50 hour MA. SPX daily chart:
The ES and NQ futures charts below were done before the open for Daily Video Service subscribers at theartofchart.net. The TF chart was done shortly after the RTH open. If you are interested in trying our services a 30 day free trial is available here.
The rising wedge support trendline I was looking at yesterday morning on ES was tested and held in RTH yesterday, and then broke overnight, but on my notes on this morning’s chart I was looking at the perfect bull flag channel that had formed and that so far today has delivered a move close to flag channel resistance, currently at 2397.50. That is the obvious next target and on a break above there the minimum target would be a retest of the Sunday night new all time high on ES at 2403.75. ES Jun 60min chart:
On NQ the very impressive support trendline that I was looking at broke down close to the open today and so NQ too is likely topping here. Another possible bull flag is forming for a possible ATH retest. NQ Jun 60min chart:
On TF I noted this morning that unless TF stopped being the weakest of the three indices then a retest of the all time high looked unlikely. TF has since been the strongest of the three and the weak 60min buy signal has now made target, but at the moment this could still be a bear flag forming. TF Jun 60min chart:
This is a very decent setup for a retest of the all time high, and with today and tomorrow both being cycle trend days I was hoping for a firmly directional green day today to deliver that retest. The tape this week has so far been low volume and very apathetic and if we are going to see that retest, it might have to wait until tomorrow. We’ll see. If we should see a hard fail through the 50 hour MA from here then the swing high might already be in. That is unless we first see a test of flag channel resistance, in which case we might just be seeing a return to flag channel support, currently at 2385. On a break below that flag channel support I’d note that about 20% of these bull flags break down, though that’s very much the lower probability option until then.
