Yesterday was surprisingly weak, and there is very definitely a setup for bears to follow that through today, though with ES back up testing 2006 overnight so far that may well not deliver.
On the daily chart there was a bearish engulfing candlestick, though not a classical one as the previous day closed down rather than up. SPX is very close to triggering a daily RSI 5 / NYMO sell signal and another day of weakness would most likely deliver that. Only three charts today as I’ve been putting together the stats for those signals since the start of 2007 and should have those ready for tomorrow’s post. SPX daily chart:
The key chart for today however is the 60min chart, and the ascending triangle that may have failed to break up yesterday, and ominously failed at a near perfect retest of broken rising channel support from 1904. If this triangle should now break below triangle support then the break up yesterday was an overthrow and the triangle target would be in the 1980 area. A further break below 1994.85 would add a double top target, also in the 1980 area. If SPX should take out yesterday’s high at 2009.28 however, then the triangle target would remain the 2019 area. SPX 60min chart:
I’m not sure that a top is cooked on SPX yet, not least because I would expect a strong spike down before the high, or that a high would at least be retested after that strong spike. I can’t see that on SPX yet, but if we see weakness today then that may be that strong spike down that I’m waiting for.
Looking at AAPL though, that high looks cooked here, and I don’t think that the current decline really has much to do with leaked celebrity selfies. The highs may yet be retested but AAPL looks very ready to retrace some of the move up from the 2013 lows. Bargain hunters should beware. AAPL daily chart:
The setup today is straightforward. There is strong support at the ES weekly pivot at 1997.30 (about 1999 SPX), and that support is strengthened further by the SPX 50 hour MA at 1999.88. Triangle support is in the 1997 area and a break below would look pretty bearish. A further break below 1994.85 SPX would target 1980 and I’d expect to make that target. Once we made that target I’d be looking for close for what to expect next. If we see a strong open and yesterday’s 2009.28 high is broken, I’d be looking for that 2019 target.
