In the video below before the open this morning I looked first at the clear bear flag rally patterns developed on ES, NQ, RTY, DAX and ESTX50, then SPX, NDX and RUT. That’s a lot of bear flags and while these don’t always break down, they usually do and the odds favor that again here. None of these have broken down yet apart from a slight break on ES rising wedge support, and if we see confirmation with a break and conversion of the ES weekly pivot at 2572.50 to resistance today or tomorrow then I’d expect all of these bear flags to start breaking down with likely minimum targets at a retest of last month’s low. Full Premarket Video from theartofchart.net – Updates on ES, NQ, RTY, DAX, ESTX50, SPX, NDX, RUT, CL, NG, GC, SI, HG, ZB, KC, SB, CC, ZW, ZC, ZS, DX, EURUSD, USDJPY, USDCAD & AUDUSD:
(more…)Slope of Hope Blog Posts
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So Far, So Good
Stan and I did an educational webinar at theartofchart.net yesterday after the close on trading in bear markets, and we were talking then about ES/SPX being at an inflection point where on a conversion of the ES weekly pivot at 2441 to resistance ES would likely head down directly into the low retest, but if decent support was found there ES should reject into a retest of the rally high and ideally head for a target in the 2550 area. You can see a recording on that webinar on our January Free Webinars page.
(more…)Goodbye To 2018
Stan and I did our end of year webinar yesterday looking at the outlook next year for equity markets including SPX, NDX, RUT, DAX & NIKK, also AMZN & AAPL, bonds, oil, gold, silver, gdx, us dollar, EURUSD, coffee, sugar, wheat, corn, bitcoin and a couple of other instruments we were asked about that I can’t recall offhand. It is well worth watching and the recording is posted here. Our annual holiday sale on annual memberships also ends on Wednesday 2nd January and if you’re interested, you can find the page for that here.
(more…)Looking Into 2019
At the weekend in Chart Chat I was talking about the 2300-50 support area on SPX, and the current rally has started from there. That area is composed of the monthly lower band and the 200 week MA, both in the 2350 area, the 50 month MA at 2330, and rising megaphone support from the 2011 low now in the 2300 area. That is a formidable support area and, if broken, could open a direct move to the double top target area 2120-2200. If it holds that would be the obvious area to end the wave A move down from the high and start the wave B rally. If we see a retest of the lows after this rally ends then that could well be a double bottom setting up for the wave B rally. SPX weekly chart:
(more…)Big Support Breaks
After repeated tests where it held, the thrust down after the Fed hike on Wednesday broke down through the big support level and potential H&S neckline in the 2530-40 SPX area and continued down. Wednesday night I was looking at the next big level on ES 2465-80 area and that too has broken yesterday. I’d be surprised not to see a strong counter-trend rally on SPX soon but it’s getting harder to identify where the next decent support might be.
(more…)Belt and Braces
SPX closed ten handles or so over the 5dma yesterday, so SPX is back on the Three Day Rule. If SPX should close back below the 5dma today or Monday then we should expect a retest of the last low at 2583.23 in the near future. At the moment the 5dma is at 2638 and SPX looks likely to close the day below it.
As it happens that would just confirm the bear flag rising wedge that has already broken down on ES with the same minimum target, so one way or the other that retest looks likely. At that point we could see the second low of a double bottom or continuation down towards the major support area below at 2530-40, the 2018 low and possible H&S neckline at 2532, and the annual pivot at 2538.
(more…)First Break Under 2600
I had food poisoning for half of last week so I didn’t manage to get a post out or remind everyone that Stan and I were doing our monthly public Chart Chat on Sunday. If you missed that the recording is posted here.
In the webinar yesterday we were looking at the likely triangle on ES/SPX and what would be likely to happen when that broke down, which it has with the move under 2600 this morning. What generally happens now is an initial break down, then a backtest back into the body of the triangle, likely in progress, and then a thrust down from the triangle, first working target mid to high 2400s though with very significant support at the annual pivot and 2018 low in the 2530-40 area where there is a possible large H&S neckline.
(more…)Phase Changes
At the open Thursday morning there was a key common thread on SPX, NDX and RUT, in that all three were either close (SPX & NDX), or at (RUT) their key resistance trendlines from the all time highs. As I’ve been writing the falling channel resistance on SPX and falling wedge resistance on NDX have both broken, with RUT having already broken up earlier today.
What this means is that this move is entering a new phase, either setting retests of the all time highs or signalling retracement and consolidation before the next move down. The more obvious move is retracement and consolidation but we could see the high retests, and I’d note that the seasonality favors the bulls into late December, and that while all the hourly RSI 14 buy signals made target yesterday, the daily RSI 14 buy signals on SPX, NDX and RUT are still nowhere near target. (more…)
The Road Less Travelled
The bull scenario initially looked good after my post last week, with clear breaks back over the daily middle band and 5dma on Friday. That triggered the 5dma Three Day Rule, which on a daily close back below the 5dma on Mon day or Tuesday would look for a retest of the most recent low. SPX then broke back below the daily middle band and 5dma at the close on Monday, and retested the 2670 low on Tuesday.
Now I was saying last week that the alternate bear scenario would look for a retest of the main retracement low at 2603.54 SPX. We have not yet seen that full test, but after the current rally, it’s likely that we will see that test. At that test SPX either finds support there on a marginal lower low, or extends lower to the 2018 low & annual pivot area 2530-40. (more…)
Santa’s Inflection Point
On my last post I was talking about the expected significant backtest on SPX, and we have now seen that retracement which has reached the 61.8% fib retrace area. At this point I’m expecting the main rally into Xmas to start in the next couple of days and that may well be starting here. However ……..
I did mention in my last post that this retracement might extend lower into a full retest of the October low, and there is a possible setup to deliver that in this inflection point. That bear case rests on a decent quality H&S that has formed and broken down on ES with a target at that retest of the late October low, with a perfect backtest of the broken neckline in the 2717/8 area overnight. The original IHS on SPX looking for the 2910 has failed and this delivers a possible Janus Flag target at a retest of the prior low in the 2600 area. A sustained break below 2660 likely seals the deal for bears.
The bull case is that this is also what I would call a Janus Flag, in that it looks like a topping pattern that breaks down and rejects hard into the preceding high (2815 area). That case is backed up by the decent quality falling megaphone that has formed from the high and would obviously need some confirmation from breaks of upside resistance. The important upside levels on ES area possible double bottom support at 2718, and a sustained break above looks for the 2760 area. Falling megaphone resistance is in the 2730 area and a break above likely seals the deal for bulls. (more…)