One reason I do my optic run views on my seven main US equity indices is because while SPX is often the technical leader, by which I mean not that it moves fastest, but that it is delivering the cleanest trendlines/patterns and fibonacci retracements, that is not always the case. That leader at the moment is the Dow Industrials, and my first two charts will illustrate why that is.
The rising wedge on SPX that I tweeted on Tuesday night hit the very well defined wedge resistance (tweeted at the high yesterday) and then broke down on the frankly very predictable not really news that QE3 had ended in October as planned, and the usual assurances that the Fed would be fighting hard to keep interest rates near zero until the stars fall from the sky. Now those of you who have been looking at my work closely for a while might have wondered why I was giving strong weight to a pattern on SPX that was mediocre due to the poorly defined support trendline, and the answer to that question is of course that .......... SPX 15min chart:
....... it was supported by a far better and directly equivalent pattern on the current technical leader index, which is the Dow. The pattern on Dow is very well formed, overthrew slightly at the high yesterday, and then broke down and retested broken wedge support at the close. At least the main part of this move up from the 1820 SPX low is over, and that overall move may well have topped out, though if so then we may well retrace, retest highs, then retrace more as part of the usual formation of a decent sized H&S or double top. Dow 15min chart: