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I’m expecting to see a retracement of the move up from the October lows start soon, and there are some targets I wanted to see made on equity indices before that happened. The last two of those were made on Friday.
The first of those was a retest of the all time high on NDX, and we saw a new high there on Friday, with a very nice looking overall rising wedges from both the 2022 low and the October 2023 low. This looks ready to turn soon.
NDX daily BBs chart:
Today is the last trading day of 2023, and is the only significantly bearish leaning day this week. Historically the stats today indicate 38.1% stats for SPX closing green, and only 28.6% green closes on NDX. That doesn’t of course mean that the day will be particularly interesting, but intraday at least the last couple of days have been more interesting than I was expecting.
On the bigger picture, I was looking for a retest of the 2023 high on SPX to set possible daily RSI 14 and RSI 5 sell signals brewing, and we saw that. The high this week so far is at 4793.30, just 25 handles below the all time high, and I’m still thinking that a decent retracement looks very close, and that SPX might make a marginal new all time high before we see that retracement.
Either way we appear to be setting up for an interesting January.
(more…)I hope everyone had a great holiday. I’ve had an enjoyable time at home with my three (adult) children. We’re not religious, but it is always a good time to see and enjoy family.
One slightly strange thing to the Brit eye about Christmas is that over here and in much of Europe the day after Christmas is a significant holiday too, always a Bank Holiday and called Boxing Day here. The odd thing is that Boxing Day doesn’t exist in the US and is an immediate return to trading the day after Christmas Day. That kind of works for me though, as I enjoy my work, and the days between Christmas and New Year are a good time to prepare for what is often a very interesting January. In my view the odds favor seeing an interesting January this time.
(more…)I didn’t really have time to fall much in love with the possible bull flag channel on SPX yesterday as it broke hard and SPX went directly to the main support level I was expecting to see tested later after a bounce. That level is rising support from the 2022 low in October which I mentioned yesterday morning as being in the 4240 area. The low yesterday was at 4238.63 and that was a solid test and reversal there. The low also established a possible alternate bull flag falling megaphone support trendline from the July high at 4606.097. So where does that leave SPX?
(more…)I always try and keep an open mind, as too strong a directional view on any trading instrument can result in tunnel vision, where the analyst sees mainly or only the evidence that supports that view. That is an obstacle to good analysis, and for an analyst who trades, can get very expensive. In trading terms it doesn’t matter whether any market goes up or down, as long as the trader is on the right side of the market. Nothing else matters. I can therefore love a market or trading scenario, but no good analyst should ever marry one.
I was talking last week about my preferred scenario on SPX with the H&S looking for the 4050 area, delivering a 50% retracement of the move up from the 2022 low, and potentially setting up another larger move up into a retest of the all time highs on SPX (and NDX). That is not the only scenario in play here however, and the odds of my main alternate scenario happening instead rose significantly yesterday at the swing low that I think was likely made at the low yesterday afternoon, barring retests and marginal lower lows as part of the bottoming process.
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