SPX fell away from the daily upper bollinger band yesterday, so this period of rising up just underneath the upper band has finished. What next? Of the three previous similar instances on the chart below (highlighted blue) two led to periods of sideways consolidation lasting several days, and the third led to a sharp retracement into the daily middle bollinger band, now in the 1587 area:
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Impulsive Move Confirmed
One thing I was looking for this week was follow-through on SPX to confirm the very bullish break over strong trendline resistance last Friday. Obviously we have been watching that follow-through and confirmation, and this means that we are definitely watching another impulsive move up. Last month’s topping process was just consolidation and the next topping process opportunity will begin when SPX breaks rising trendline support from the November low. There is no strong reason to think that will happen soon. (more…)
After The Break Up
Now that SPX has firmly broken over resistance I have been carefully considering the trendline setup here on SPX. That’s not to say that the short term bear case is entirely dead yet, but it is mostly dead and I won’t be considering it seriously unless we see a very sharp retracement below broken resistance in the very near future. One of the last wisps of hope here for the bear case here is the TLT chart, which still hasn’t yet broken back below broken falling wedge resistance and the 200 DMA in the same area. It’s also worth noting of course that SPX has not yet broken above negative RSI divergence on either of the SPX daily or weekly charts: (more…)
SPX Breaks Up
SPX was underneath some formidable trendline resistance on Friday, but broke it all on Friday morning. Most notable of the broken resistance trendlines was the trendline from the 2000 high, as I have been thinking of the pattern since then as the secular bear market pattern. Whether that’s right or not that trendline is now broken:
A Modest Proposal
There was a cliffhanger close on Friday, with ES having tested but not broken over declining resistance from the high. Overnight ES has broken over that and I am expecting to see some follow through to the upside. as I mentioned on Friday Morning, this could be viewed as a falling wedge and in that case the technical target is a test of the highs, but wedges aren’t good at making the full target, and there is strong resistance in the 1570/1 area:
