The title phrase above is one I’ve always liked as it has a certain elegance and economy that appeals to me. It’s talking about how every part of a pig can be cooked and eaten. That doesn’t just apply to the pig of course, in China the description ‘heart of wolf, lung of dog’ can be applied to people as a statement that they have no redeeming features at all, as these are famously the only parts of any animal that cannot be used in cooking to make something nutritious and edible. Useful to know for anyone that has been hesitating over their first try at preparing panda testicles, sea-lion sphincter or alligator hide.
What’s my point? Well everything is in place for this pullback except the pullback itself, though that may at last be getting started as I have been preparing this post. If that can be sustained into breaks and conversion of the weekly pivots on ES, NQ and TF to resistance, then this show can finally get onto the road.
On the SPX daily chart there is now a nicely formed RSI 5 / NYMO sell signal brewing, and an initial decline is needed to fix that strong sell signal. the obvious target for a decent retracement is a test of the rising wedge support trendline currently in the 2345 area, though initially we are looking for a decline into the 2400-20 area before a strong rally. SPX daily chart:
On the NDX daily chart there is also a strong RSI 5 sell signal brewing and again an initial decline is needed to fix the signal. As I write NDX is over 100 handles down from the high today. Any close under 5940 would likely be enough to fix the signal. NDX daily chart:
The ES, NQ and TF futures charts below were done an hour before the RTH open for Daily Video Service subscribers at theartofchart.net. If you are interested in trying our services a 30 day free trial is available here.
The key to the downside here is the break and conversions on ES, NQ and TF, and on ES that is at 2464.75. The smaller double top I was looking at on this chart has made target and ES is testing support on the larger pattern. On a sustained break below 2462 that looks for the 2446 area next. ES Sep 60min chart:
NQ has failed hard at the 6000 test so far and needs to convert the weekly pivot at 5894 to resistance to open the downside. NQ Sep 60min chart:
TF has broken down from the rising wedge and needs to convert the weekly pivot at 1433 to resistance to open the downside. TF Sep 60min chart:
While I’ve been writing all three indices have broken their weekly pivots, which is a promising start. Looking for more, not necessarily today.
