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There’s no need for a ton of graphs. I just want to share three index charts which share my view that we’re just grinding out a peak, no different than before.
Here is the Dow Jones Composite with its three exponential moving averages. Take note of their past behavior and their relationship to the price bars in the two prior downturns. We have been through all this before.
Before the open this morning I was cautiously predicting that ES would rally today to a higher high than yesterday, ideally failing today at a high in the 2865-9 area. As it happened the low of the day was happening at the time on ES, slightly before the RTH open, and ES is now testing yesterday’s high. So far, so good.
The scenario I was looking at then and now was a modest higher low and then a modest higher high to form a bear flag channel into a test of declining resistance from the highs on SPX. I have tentatively marked an X on the SPX 5min chart the ideal time and level for SPX to top out today and we’ll whether that delivers exactly in the next hour or so. If not there is some wiggle room.