SPX broke back over the 5dma last Thursday and that put SPX back on the Three Day Rule, which is that after a decline of more than 2% followed by a break back over the 5dma, then SPX must hold above the 5dma the next two daily closes. If SPX fails to manage that then the retracement low (2801) should be retested before the initial high before the decline (all time high). The close on the third day on Monday was a clear break back below the 5dma. That low retest would normally be soon after the break and this a very strong stat, so I am looking for that 2801 retest.(more…)
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Before the open this morning I was cautiously predicting that ES would rally today to a higher high than yesterday, ideally failing today at a high in the 2865-9 area. As it happened the low of the day was happening at the time on ES, slightly before the RTH open, and ES is now testing yesterday’s high. So far, so good.
The scenario I was looking at then and now was a modest higher low and then a modest higher high to form a bear flag channel into a test of declining resistance from the highs on SPX. I have tentatively marked an X on the SPX 5min chart the ideal time and level for SPX to top out today and we’ll whether that delivers exactly in the next hour or so. If not there is some wiggle room.(more…)
On Thursday before I wrote my post SPX went a few handles below the daily 3sd lower band, and as I’d generally expect we saw a strong rally from there. On Friday, somewhat to my surprise SPX again went a few handles below the daily 3sd lower band, and we then saw an even stronger rally off that low. This morning, with the daily 3sd lower band currently at 2816, the current low of the day is a few handles lower and we’re probably going to see another rally, though it’s hard to say whether it will be as strong as the others.(more…)
Last week I was looking at support that needed to be broken at the SPX daily middle band to open further downside and obviously SPX did that and could be at or close to the wave A low here, looking then for a B wave rally, and then a C wave down into the next low window and to complete the current move. On Sunday’s free public Chart Chat I was talking about a possible H&S target in the 2840 area which was reached at the lows this morning. If you missed Sunday’s Chart Chat or would like to see that again, that is posted on our May Free Webinars page.
We hold a subscriber only webinar every month at which we answer any questions attendees have, and review important markets in response to those questions, and we are holding one tonight at which, this time only, all are welcome. So if you’d like to see that you can register for that on our May Free Webinars page or you can register to attend using this direct link.(more…)
I last wrote about China’s Shanghai Index (SSEC) on March 25, at which time I identified 3150 as major resistance. Price had closed at 3043.03 that day.
Since then, price briefly broke above 3150 to hit a high of 3288.45 on April 8, and, after retesting that level several times over the next few days, it finally broke and closed below on April 25. In Sunday’s overnight trading it closed today (Monday) at 2906.46.(more…)
It has been a while since we’re introduced any new technical studies to SlopeCharts, but we’re going to be beefing up this portion of the product. The newest entry, available to you right now, is the Average Directional Index (ADX).
The most important thing to understand about ADX that makes it different than most indicators is that, in spite of the word “directional” in its name, it actually should not be heeded for guidance about direction. The indicator is all about trend strength. In other words, the ADX could be moving higher and higher while prices are moving lower and lower, and all the ADX is telling you is that the trend is strong and getting stronger. The fact ADX is going “up’ doesn’t mean prices are doing the same.(more…)
Since my post a week ago SPX has retested the all time high as expected and made a marginal higher high, the rising wedge from the December low has broken down, the second daily RSI 5 sell signal since the December low has fixed, the first having played out into the March low, SPX has broken important short term trend support at the 50 hour MA for the first time since March, and backtested that as resistance, and also broken the weekly pivot at 2925.(more…)