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My rally target yesterday morning was a retest of the daily middle band at 2100. SPX gapped over that this morning and the question now is whether the bulls can hold this break into the close. If they can then that would be impressively bullish and the new highs scenario would be back on the table. SPX daily chart:

Seriously Choppy Market

I spent hours this morning doing intricate charts on SPX, INDU, TRAN, NDX, RUT and NYA, and came to the clear conclusion that all but TRAN had clear bottoming patterns that had not made target, and in the case of INDU and NDX, we're only mid-move from the low. After the bad NFP numbers all these patterns have now made target so bulls no longer have pattern support for going higher, though I'd have preferred that the indices had waited until after I published these to make target. We'll see whether this break up can last the rest of the day . SPX INDU TRAN 3x scan chart:

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SPX blew through my 2072.37 support yesterday and so my lean is now that the spring high was made at 2025. SPX went well below the daily lower band yesterday but rallied to close on it, and the question today is whether we are to expect a rally soon to retest the daily middle band as resistance (currently 2100 area and falling), or whether bears can manage a lower band ride into double top support at 2039. SPX daily chart:

Expecting Rally Soon

I'm leaning towards the bounce scenario, as a falling wedge has formed from the 2020 high and broken up at the close yesterday afternoon. SPX may well retest yesterday's low, and might go a few handles lower, but that falling wedge should then deliver a bounce into at least the 2088 area, and possibly as high as 2100. SPX 5min chart:

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The trend day down yesterday broke the daily middle band and stopped at the 50 day MA. Support today is at the daily lower band at 2080 and the 2072.37 low. On a break below 2072.37 the spring high is most likely in, and the next big level would be double top support at 2039.69.Until we see that break below 2072.37 however, I'm still looking for the spring high in the one of the 2140 or 2170 areas. SPX daily chart:

A Moment of Truth

Bonds have been falling even faster than I expected but there may be a rally coming shortly as falling wedge resistance for the current move was broken slightly at the highs yesterday. If that can follow through in the next day or two then we should see a decent rally. TLT 5min chart:

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After the spike yesterday morning SPX drifted down all day. At the moment the 50 hour MA at 2109 is holding as support but there is a case for a retracement here to retest the daily middle band at 2102. Bulls would clearly need to strongly defend that level and would need to deliver a daily close at or above that today to keep this choppy uptrend intact. SPX daily chart:

Back and Fill

I mentioned yesterday morning that I didn't have an established support trendline for this move up. I'm looking for this retracement to establish that support trendline. I do have an educated guess as to how that may happen, and that's shown on the chart below and is a good fit with support at the daily middle band. We'll see if that channel gets established today.  SPX 5min chart:

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SPX finished forming an IHS on Friday and broke up with a target in the 2127 area. Support is a little hard to call as there is no support trendline established yet, but there should be no concern about the uptrend while SPX stays over the 60 hour MA at 2108.5. SPX 5min chart:

One More Heave

If I'm right that the final move up into the spring high has started, then the two main target areas are around the weekly upper band, currently in the 2137 area and most likely in the 2140 area by the time it is reached, and the monthly upper band, currently in the 2170 area. I'm expecting one of these two areas to hold as resistance but I do have a last lower probability triangle target at 2185, and that's just under main trendline resistance in the 2190 area, so I'm not ruling that out. Hopefully a helpful pattern will form on the way to make calling the spring high area easier. SPX weekly chart:

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SPX broke the short term rising channel yesterday as well as the daily middle band. I'm not seeing any strong reason to think that yesterday's low won't be retested and if so there is strong support at the last significant low and the weekly middle band, both at 2072. A break and particularly a close below would open up a test of double top support at 2039. Overhead resistance is at the daily middle band at 2096 and bulls really need to get back over and hold over the 50 hour MA at 2108. SPX daily chart:

Bounce Coming on Bonds ....... Probably

There is a very nice setup for a bounce here on TLT with a possible double bottom targeting the 128 area on a break over 126.13. If seen then the underthrow of megaphone support yesterday suggest that the megaphone will then break up, with an obvious target in the 128.95 area at the 61.8% fib. It's worth remembering though that these megaphones break down 30% of the time, and on a break below 124 this rally setup would be gone. TLT 60min chart:

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The markets haven't been behaving quite as I expected the last couple of days, and I'm wondering whether the spring high might already be in. If so we might well find that out today.

Bulls want to get this back over the 50 hour MA into the next move up, either directly from here or ideally from a test of rising channel support, now in the 2088-90 area. If they can't hold that support then the uptrend is called into very serious question. Triangle support is now in the 2060 area but main support is at the double top support low at 2039.69. On a break below the spring high was most likely made at 2125.92. Until we see a break below rising channel support at 2088-90 though, the bulls still have the technical edge here. SPX 60min chart:

US Dollar Testing Main Uptrend Support

USD tested main rising megaphone support yesterday, and broke it slightly overnight. The short term low looks in or very close and I'm expecting a big rally, but the overnight break may have big implications and I'll be looking hard at that today. USD daily chart:

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The low in October was a very important technical low on all equity indices, and one of my daily optic run folders shows all of the patterns formed on my main group of these since that October low. I know that there are many wondering why I think that a significant high is imminent, and hopefully this will shed some light on this for them. Am I right? Well there's only one way to find out for sure, time will tell as always.

It has been obvious to me for years that there is a lot of crossover between my classical work and Elliot Wave (EW). EW has taken  a reputational beating from the forecasting antics of Prechter's Elliot Wave International over the last decade, but I follow or work with several outstanding EWers who don't work for the EWI clown show, and there's no doubt in my mind that EW is a very powerful, though complex and tricky tool. For the sake of clarity and simplicity I'll explain the chart below from an EW perspective.

From an EW perspective I have the October low as the wave 4 low of the primary three wave up from October 2011, and as with many wave threes it has been a doozy. Wave 5s often form rising wedges, known as ending diagonals in this context, and on the first six of the seven charts below clear rising wedges have formed since the October low.

Three of these rising wedges have seen daily closes under rising wedge support in recent weeks. SPX is one of those and NDX and WLSH are the other two. This puts these three, and most likely all of these indices into topping processes at the moment. SPX daily chart:

The Magnificent Seven

Dow has been particularly weak relative to most, and has pinocchioed wedge support four times, closing back above the trendline on each occasion. When we do see a daily close below wedge support that should be a good signal that the topping process is ending or ended. My upside target here is a retest of the 18288 high to make the second high of a double top. INDU daily chart:

The Magnificent Seven

The Wilshire 5000 is the broadest US index and again has a very nicely formed rising wedge showing obvious signs of weakness. WLSH daily chart:

The Magnificent Seven

Another clear rising wedge showing signs of weakness on NDX, though for clear trendlines I prefer the broad Nasdaq index COMPQ. NDX daily chart:

The Magnificent Seven

On COMPQ there is a very clear and currently unbroken rising wedge. COMPQ daily chart:

The Magnificent Seven

I was saying yesterday morning that I was looking for a hit of rising wedge support on RUT yesterday and there was a perfect wedge support hit at the low. Assuming that holds I'm now ideally looking for a hit of wedge resistance in the 1290-1300 area. RUT daily chart:

The Magnificent Seven

TRAN spends a lot of time in a parallel universe and so spends long periods not correlating much with the other indices. At the moment TRAN made the last all time high in November, against the end of February on Dow. This means that there is a bearish Dow Theory non-confirmation at the moment that will last until TRAN makes a new all time high. That should persist through this spring high and the subsequent correction. In pattern terms TRAN has been forming a descending triangle since December and these, as with rising wedges, break down about 70% of the time. I have TRAN in a short term rising megaphone which I am watching carefully, and I'm thinking TRAN might just manage another touch of triangle resistance in the 9120 area, depending on when that small megaphone breaks down. TRAN daily chart:

The Magnificent Seven

I wasn't entirely happy with the low yesterday, as it didn't reach my SPX channel support, though it did retest the daily middle band slightly above, and tested rising wedge support on RUT. I'm giving the low a provisional pass as long as SPX can hold the 50 hour MA, which closed yesterday in the 2108 area, equivalent to 2102 area on ES. With ES at 2096 at the time of writing that's a maybe for today. If SPX opens well under the 50 hour MA then we may well see another decline to finish the job, and my SPX rising channel support is now in the 2086 area (about 2080 ES).

I'll round up with a few other instruments. GC has been very choppy this week, but I am still leaning towards at least a test of the 1142 low as long as the last significant high at 1224.5 isn't broken.

ZB has been declining as expected and is getting close to the initial target zone I gave on ZB in the 158 area. I'll be looking again at bonds today for the decline structure, though bonds have been very choppy the last few weeks.

CL is in a big inflection point where it can break up over 58/9 towards my target in the 66-8 area, or break below 53.5 to resume the downtrend. break. I'd like to see the higher target made but technically don't have a strong lean here.

I posted a DX (USD) chart on twitter last night with a strong bullish bias. The falling wedge I showed is breaking down at the moment and I'm expecting this to be a bullish underthrow. I might be mistaken of course.

Source: Springheel Jack

SPX reversed hard in the 2124-8 zone I gave yesterday morning, and we are seeing whether it can reach rising channel support, which should be in the 2085-9 area today depending on the time it would be reached. The daily middle band closed at 2092 last night. There is still some unbroken support at the 50 hour MA at 2104.5. SPX daily chart:

A Brother From Another Mother

Quite a few readers over the last few weeks have struggled a bit with the idea that the SPX rising wedge has broken down, that I am regarding this as a current and important pattern that should deliver a decent decline, but that I have still been forecasting new highs that have been made.

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SPX made the second day of a daily upper band ride on Friday, and might do a third today. Until demonstrated otherwise though I'm leaning towards seeing a decent retracement in the near future. Short term rising channel support is in the 2124-8 area today, and if we should then see a retracement to channel support, that is currently just under the daily middle band in the 2085-90 area. SPX daily chart:

Pushing Up From The Triangle

If we do see some rejection in the 2124-8 area, there is still significant support at the 50 hour MA, which closed Friday at 2103.5. SPX 60min chart:

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