That was an interesting day yesterday and SPX reached the targets I was talking about in the morning at the retest of the 50 hour MA and broken rising channel support. The high falls between two fibonacci retracement targets but otherwise is a model rally high. SPX 60min chart:
BUT …… SPX wasn’t showing any sign of turning there, and on the daily chart SPX punched back to close well over the daily middle band. Unless that is reversed quickly this morning then the next obvious target is the upper band, currently at 1891.5. The SPX middle band closed yesterday at 1863.5 SPX and is important support today. SPX daily chart:
Supporting that target back at the SPX daily upper band is a rising wedge from Tuesday’s low that broke up on the Fed minutes yesterday. It’s a nice looking setup and the target is in the 1887.5 SPX area. Broken wedge resistance is in the same area as the daily middle band so if this bull scenario is going to play out that support should be strong today. SPX 1min chart:
I posted an IHS breaking up on USD a few days ago and that failed quickly, not altogether to my surprise as I expressed some continuing doubts about the bull case on USD at the time. We should see at least a test of the 2014 low and that could overshoot as far as main support at 78.60. USD daily chart:
I posted a TLT chart in early January showing a possible falling megaphone with a shorter term double-bottom targeting megaphone resistance. Since then TLT has been slowly drifting towards the target, now in the 114.5 area, though there is quite a bit of negative RSI divergence developing and I have some doubts about that target being hit, though the technical setup is still solid. TLT daily chart:
The key question today is whether bulls can hold yesterday’s break upwards, and for that bulls should ideally stay above broken resistance in the 1860-4 area SPX today. A sustained break below could be a new wave down. While that support area holds bulls are back in the technical saddle.
