The FOMC news today is likely to be that there is no news, that interest rates won't be rising this month, and there's no press conference after to add spin to the announcement. Nonetheless markets will likely move on this absence of news, and I've been considering which way that might go. The bad news though is that there are decent setups in both directions here.


On SPX yesterday the low was 2077, slightly above my target in the 2074 area but maybe close enough. The key levels today are the ES weekly pivot at 2083.2 (approx 2087/8 SPX), and the SPX 50 hour MA at 2091 (approx 2086/7 ES). Under these levels this current pullback can go lower, above then the lean would be higher. Over 2092 ES (approx 2096/7 SPX) I'd be looking for a retest of the current high high at 2111 and likely marginally higher.
ES Jun 60min chart:

FOMC Chop?

NQ Jun 60min chart:

Friday was a strange day looking at SPX, NDX and RUT side by side. NDX/NQ was daddy bear, making the target I gave in the morning and the test of decent support that I gave at the same time. SPX/ES was mummy bear, with a decent retrace but not reaching obvious support. RUT/TF was (possibly adopted) baby bear,  becoming so detached from the other two that RUT actually returned to retest the current swing high in the afternoon. 
So where does that leave us this morning? Well there are mixed signals. On SPX the important 50 hour MA, currently at 2091, was broken and  retested as resistance, and with rising wedge also broken the obvious target remains at the possible H&S neckline in the 2074 area. There are no 60min or 15min buy signals yet on SPX, NDX or RUT. SPX 60min chart:

The 60min RSI 14 and RSI 5 sell signals on SPX that fixed in the last hour on Wednesday were playing out yesterday. The RSI 5 signal has made target, but the RSI 14 sell signal is still some way short of target. The low yesterday was at a test of the important 50 hour MA on SPX and it could find support there. The falling wedge that I posted on twitter yesterday afternoon is suggesting a possible strong bounce or retest of Wednesday's high, and if bears want to avoid that then they have important targets below to be tested and broken this morning.


SPX didn't quite make my 2114-16 target area yesterday, but it reached 2011, and the pullback in the last hour was sharp enough to fix an SPX 60min sell signal. Having had a look across the indices I'm logging this as a candidate high and what would be required next are some significant support breaks.

The first support break I was looking at on the SPX chart last night is a small one but we've already seen that break at the open today, and that is the break of rising wedge support on the little rising wedge from last week's low at 2040. SPX 60min chart:

Candidate High - Need Some Support Breaks

A 60min sell signal also fixed on RUT, and on the larger rising wedge on RUT there has already been the touch of rising wedge support that SPX missed doing yesterday. RUT 60min chart:

Candidate High - Need Some Support Breaks

I'm not huge on trading with correlations, but I would say that to the extent that this move up on SPX has been supported by the big rally on oil, that support may well be ending here, as this is a very sweet setup on oil to retest the current bear market low at 26. We'll see how that goes. WTIC daily chart:

Candidate High - Need Some Support Breaks

I have strong support on SPX in the 2078-84 area (approx 2072-8 ES), and I'm not getting excited about the prospects for a retracement here until that support is broken, but the setup here looks promising so far. We'll see how that develops today and tomorrow.

Source: Springheel Jack

Yesterday's low at 2091/2 SPX (2085 ES) was retested overnight in globex and held. Unless that fails first today the obvious next target above is in the 2114/5 area at trendline resistance. That is supported by the intersection of two resistance trendlines on ES there as well, and if hit that will be a possible top for this move up from the February low, something I would call a candidate high. Ideally we'd test that today and there would be a clear reversal there, ideally into a red close for the day. SPX 60min chart:


There are plenty of reasons to expect a strong retracement soon. There are strong open daily sell signals fixed on SPX, NDX and RUT. The 'Crazytown' extreme overbought area relative to the 45 day pivot has been tested repeatedly over the last week, and with Crazytown starting at 2085 today, ES has spent the whole day so far in Crazytown. This is an extreme level and periods trading inside it do not tend to last long.

That said the bears had the reassurance of being not far below major resistance trendlines until yesterday afternoon, and those major trendlines are now not far below, which means that they are no longer resistance, and may possibly now turn into support. I noted on my SPX daily chart a couple of weeks ago that a break above the SPX trendline that broke yesterday would have a target at a retest of the all time high at 2134. Unless we see a break back over 2116 then I'm still looking for a strong retracement before that test. If we see a break back over 2116 SPX then I'd be looking for a test of the high first and then most likely that strong retracement very soon afterwards. The area above 'Crazytown' is 'Bet Jerry's House' and it's not called that because SPX has ever spent much time there in the past. That starts at 2115 SPX today and I would take a moment just to clarify that under no circumstances would I ever suggest going all in on any trade, as regardless of the setup that is never a sane option.


I said to somebody last week that topping processes would often last until you were completely bored with them, and then they'd run on a bit longer, and this topping process has been a good case in point.

I was saying on Friday that the ideal high would be just a little higher and that was very much on my mind as SPX was retracing a bit on Friday and retracing further on ES overnight. Stan was looking for a backtest to broken resistance in the 2056-8 area, and I'd been thinking we'd see that in trading hours but we saw that last night instead. That support held, the sell signals on the ES, NQ and TF charts all made target or very close (TF), and 60min buy signals fixed on both ES and NQ, which is why I was talking about a likely run to a marginal new high on twitter before the open.


On Thursday and Friday there was an impressive battle at daily middle band support on both SPX and RUT. At the close on Friday the bulls had still not conceded the daily middle band, and if that isn't going to break then the next obvious target would be the daily upper band currently in the 2076 area. On a move higher there are still open and obvious targets at the IHS target at 2082 and declining resistance from the 2015 high, currently in the 2090-2 area and a decent looking match with possible trendline resistance and the 200dma on RUT, currently both in the 1135 area. There are daily sell signals fixed across the board here, with both daily RSI 14 and RSI 5 sell signals fixed on both RUT and NDX, and a strong daily RSI 5 / NYMO sell signal on SPX, but a marginal new high wouldn't invalidate those sell signals, and are a real possibility here unless bears can break SPX and RUT below the daily middle bands on a daily closing basis. The SPX and RUT daily middle bands closed Friday at 2045 and 1095 respectively. SPX daily chart:


For the third day running ES is opening up with the weekly pivot at 2050.50 and that will once again be the key battleground level today, supported by the SPX 50 hour MA at 2058.8 effectively being at the same level. On Wednesday bulls had the technical edge and dominated the day, but couldn't hold the move. Yesterday the bears had the technical edge and dominated the day but rallied back in the last hour to close at the daily middle band on SPX, failing to break this key support level on the daily close and setting the stage for this overnight rally back to the ES weekly pivot.


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