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Hey Slopers, this is my first post on Slope of Hope, and I hope to be able to bring you plenty more in the future.
I want to keep my post short and sweet and just share a couple tradeable ideas. I don't have a crystal glass on where the markets are going to head to next, so I thought I would share one long and one short that could turn into an actionable idea depending on which way the market breaks.
Long: Baidu.com (BIDU)
I've been posting my main USD chart regularly this year, and have been describing it as my big picture chart, but it is only the big picture in the context of the much shorter term charts that I generally post. It is a 30 month daily chart, and for those of you not familiar with it the main points to note are:
1. The falling wedge target at 88.71
2. The rising channel that has formed since the May 2012 low.
3. The possible IHS forming that would currently be more than halfway through the right shoulder.
4. The shorter term declining channel that has formed since the January 2012 high. That's worth noting as a break over it will most likely indicate that USD will have bottomed for 2012.
That is the immediate picture for USD and obviously, it looks bullish, with the caveat that USD has not yet hit the obvious rising channel support target, currently in the 78 area. It may not hit channel support however, and in any case, if the IHS completes and plays out, I would expect the rising channel to break upwards as that happened:
Since TK is in VA Beach, I felt the SOH east-side pressure to post something. P.S. – Tim, you might want to avoid apartment buildings in that area… (Editor: noted!)
Even with the recent weakness, the (simplified) SPX cloud chart still shows price well-above support:
I posted a chart on twitter late yesterday which has had over 1500 hits so far, and it's the most important chart to look at today. That chart is the SPX 15min chart which is showing the possible IHS that may be forming at the 1387.5 area neckline with a target on the 1417 area. Yesterday was a trend day, and that's generally followed by a consolidation day, and that consolidation may now form a right shoulder on this pattern. If that forms and the neckline breaks up, then historically these IHSes on SPX generally make the target. I've marked in a possible path within the nice little rising channel that has formed from the low.
There are two other things to note from this chart however. The first is that the high yesterday hit the strong resistance area that I was highlighting yesterday morning, and that area is obviously still strong resistance. The second is that there was negative RSI divergence from overbought on the ES 15min chart at the close yesterday. I mentioned yesterday morning that if the downtrend was to continue then this rally would most likely fail the next time we saw this. I'll be watching that rising channel support on the SPX 15min today:
"Nothing happens on this ship that I don't know about. She speaks to me in the night….. You know what's out there? Wind and rain, and some damn big waves, reefs and rocks, sandbars, and enough fog and night to hide it all." - "White Squall" (1996)
