The rally that looked very likely to happen yesterday morning never happened, with bears dominating the day and every promising looking start to a rally killed off quickly. How does that look this morning? Well it still looks very promising, but so far today the bears are also dominating the tape. Will there be a rally to set up a right shoulder for a larger H&S on SPX? Well there is a ton of positive divergence here, but the failure yesterday tells us that this market is trending strongly and that may persist through today as well. A strongly trending market (not talking about trend days) can just run over all counter-trend setups and divergence until the market is good and ready to turn. For today a break above the current HOD at 2051.53 would be a promising sign that a decent rally here might be possible.
For what it’s worth the rally setup here still looks great, and the current retracement low on SPX is now a lot closer to the ideal neckline on that H&S, which is at 2034. We’ll see how that goes today but SPX could just continue down, so any rally would be more interesting for the short entry at the rally high, than this possible long entry at what might or might not be a short term low. We’ll see.
I’m running late today and I haven’t posted my theartofchart.net morning bonus charts here for a few days so I’ll do that this morning, and that gives you a look at the NQ, TF, USD, oil, gold and bonds that I cover there rather than here nowadays.
If you’d like to see these every morning you can sign up for either of the Chart Chat or Daily Video services. The Daily Video service also includes an update video from Stan every night, the Chart Chat service includes two of our Chart Chat webinars every week on Monday and Wednesday mornings before the open. Both services include a private twitter feed with updates posted there, though that’s mainly oriented towards intraday trading on ES. We’re planning to increase the price on the Daily Video service at the end of May now that the website upgrade is almost complete, and no price increases will ever be applied to any existing subscribers as long as their subscription remains continuous, so if you are thinking of signing up I’d suggest deciding on that before the end of May. If you’re interested in learning more then there is an introduction video at the top of the Subscriptions page here.
ES Jun 60min chart:
NQ Jun 60min chart:
TF Jun 60min chart:
DX Jun 60min chart:
CL Jun 60min chart:
GC May 60min chart:
ZB Jun 60min chart:
If we should see a decent rally today, then the ideal right shoulder high on that larger H&S would still be in the 2075 area, and that level is still an excellent match with a retest of the daily middle band, currently at 2077. The 50 hour MA is now at 2066 however and that remains strong resistance. Any rally here, if seen at all, may well fail there.
Stan and I are doing our monthly public Chart chat on Sunday at 4pm EST. That is free to all, and if you enjoy good TA, or have any interest in where the major trading instruments might be headed over coming weeks and months, then you can register for that here. We also do regular trader education webinars on Thursdays after the close and if you are interested in any of those then the descriptions and links are on the same page.
