The Three Bears

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I was saying last week that a fill of the open gap from 2711.93, I’d be disregarding the Three Day Rule target (a retest of 2553.80). The Three Day Rule target technically hasn’t failed yet, but the first downside scenario is likely failing, and we are now left with the remaining two scenarios.

The secondary scenario is that a large triangle is forming here, and that SPX is heading towards triangle resistance, currently in the 2745 area. As triangles are to an extent a ‘Get Out Of Jail Free’ card for pattern targets, on a fail there we would likely still reach the Three Day Rule target, and I’d add this to the other two exceptions when the rule triggered while a triangle was forming.

If we do see this scenario develop then as SPX moves to triangle resistance NDX and RUT may reach their IHS targets in the 6945 and 1608 areas respectively.

If SPX breaks over triangle resistance then the Three Day Rule has had the first fail, and SPX would likely reach that IHS target in the 2792 area. At that point I’d be fairly neutral on direction, though excepting at least a retracement sometime soon.

Full Intraday Video from theartofchart.net – Update on ES, NQ and TF (at the start) and then DX, CL, NG, GC, ZB, HG, KC, SB, CC, ZW, EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD and NZDUSD:

SPX 60min chart:

180417 SPX 60min

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