Markets were looking somewhat schizophrenic yesterday morning but that's not the case today. SPX spent a dull day forming a bull flag above broken resistance. The next obvious move is upwards into the 1520s:
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Parallel Universes (by Springheel Jack)
SPX closed the week five points under the weekly upper bollinger band, delivering a sixth straight week with a close near this level. The weekly upper BB is rising at about ten points per week so if this continues for a seventh week the likely closing range would be in the 1528 – 1534 area:
More Bonds Charts (by Springheel Jack)
There have been three instances since the start of 2013 where on the SPX 15min chart there have been clear lower highs and lows, delivering a clear retracement or consolidation period. The previous two were both short, lasted less than two days before breaking up, and were in effect bull flags. The third retracement started yesterday. Here’s the setup on that chart. I have the obvious initial target for this move in the 1490-4 area, anything lower should deliver a decent retracement lasting considerably longer than the last two:
A Look at Bonds (by Springheel Jack)
One thing that is characteristic of strong trends is that you can see nice bear setups repeatedly trashed while the index keeps on pushing up. That was the case yesterday when ES pushed back over the 50 hour MA and just kept on going. The 50 HMA is now at 1499 and is now support again. There is a short term double top and negative 60min RSI divergence with a target in the 1499.5 area so I'm expecting to at least see that level tested early today. If we see more downside after that, strong support has now been established at 1491:
