Yesterday morning ES tested the weekly pivot at 2035.5, and then SPX tested the 50 hour MA and then SPX was off to the races again. That 50 hour MA has held on five tests out of the last six trading days and until we see a break below it this uptrend is still very much intact. That first break below would normally also precede the main high, so that main high still doesn’t look close here. SPX 60min chart:
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In Between Daze
SPX declined modestly yesterday, bottoming out at 2001, just above the 1995-2000 target range I posted in the morning, and has recovered strongly overnight. As I said yesterday I’m not seeing anything to strongly suggest a high here and am looking at trendlines in the 2040 and 2060 areas for resistance. If we see a break below 1992 today I may reconsider that view. SPX daily chart:
BOJ Bombshell
Well we looked very close to a high at the close yesterday but with the gap over strong resistance likely at the open we could see an extension further upwards. On a sustained break over the rising wedge resistance trendline on Dow then we are forming a new pattern that is not yet clear. The same applies on SPX. Dow 60min chart:
The Air Is Getting Thin
SPX broke above the daily middle band yesterday and tested the 100 DMA. More importantly though, the high yesterday was within a couple of points of testing the weekly middle band. Given that today is Friday that may well be formidable resistance today, and while I’d quite like to see a test of yesterday’s high today, I’m very doubtful about seeing a move significantly higher. This is closing resistance, so only the closing price today is important for that. We could see a move somewhat higher intraday. SPX weekly chart:
The Shadow of 1987
On Wednesday night, after some seriously wild action had settled down a bit after hours, I made some educated guesses in my trading room about what ES/SPX might do over the next few days. Some of these I also talked about on twitter then and yesterday morning. They were as follows from ES 1842-3 at the time:
1. ES was making the second low of a double bottom targeting the 1855 area (Topped at 1857)
2. That move should make the second high of a double top (target 1821 area) (bottomed 1815)
3. An (Thursday) AM low would be made on SPX in the 1830-40 ES area (low was 1828)
4. SPX would then break up from an IHS with a target in the 1920 area (pending)
5. That 1920 area would be reached on Thurs/Fri this week (pending)
6. SPX would reverse back down hard to hit the 1789 double top target (pending)
6. That double-top target would be hit Tues – Thurs next week (pending) (more…)
