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ES made a new all time high overnight, and SPX is getting close to testing the very strong resistance zone above. That has moved up a bit since I was looking at that a few days ago, and on the weekly chart that is now in the 2022-8 zone, with the weekly upper band in the 2022/3 area and rising wedge resistance from the 1343 low now in the 2026-8 area. SPX weekly chart:

Resistible Force Approaches Moving Objects

On the daily chart resistance is at rising wedge resistance from the January low, now in the 2020 area, and the weekly upper band, now in the 2022 area. SPX daily chart:

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Well we finally got the retracement I was looking for. It was shallow at 23.6% but the 1990 low established the rising channel from 1904 that I had been mentioning as a possibility since last week. Hopefully everyone saw that when I posted it on twitter after the low. There is still a possibility that a double top is forming at a test of the current highs, but I'm expecting another push up first.  I think the next significant retracement will most likely be a significant high, or start the topping process for such a high. SPX 60min chart:

Geopolitical Risks

Why do I think that? well I've been looking for that significant high in the 2011-21 range and on the daily chart there is now clear negative divergence on the RSI 5 and the NYMO. In the short term SPX should break up from a bull flag into my resistance area, but the next significant down day will most likely trigger a strong sell signal like the strong RSI 5 and NYMO buy signal I called at the 1904 low. I'm looking for a test of the daily upper bollinger band before that sell signal triggers, and that is now at 2020, along with the other resistance levels in the same area that I have talked about. SPX daily chart:

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SPX traded sideways yesterday in what looked quite a lot like a bull flag, but has broken down overnight. It seems very likely that an overdue retracement has started, though we might still retest the current high to form a small double top. The main fib retracement targets are the 23.6% fib retrace at 1990, the 38.2% fib retrace at 1980, and the 50% retrace at 1973. The 50 hour MA is at 1992 and might hold for the 23.6% option.

Rising wedge support has already broken, so that is no longer support. SPX 60min chart:

Retracement Targets

I'm leaning towards either of the 1980 or 1973 targets ideally, as this would (on my primary scenario) be setting up a topping pattern for a last new high. I have main support at 1956 at rising wedge support from the January low and the 50 DMA, but if SPX gets that far then a stronger high than I was expecting would already most likely be in. SPX daily chart:

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Another day with no significant pullback and a new all time high yesterday. There is still definitely a small retracement needed soon but that will happen when it happens. In the meantime SPX is getting close to testing my main resistance zone, which is now in the 2011-21 area. On the daily chart the resistance levels in the zone are the daily upper band, currently at 2011, and rising wedge resistance from the January low, currently in the 2015 area. The daily upper band will most likely cross 2015 within a couple of days. SPX daily chart:

Another Day, Another New High

On the weekly chart the resistance levels in the zone are the weekly upper band, currently at 2021, and rising wedge resistance from the 1343 low, also currently in the 2021 area. As well as being resistance levels these are all also targets, so if we are to see a strong reversal from that resistance zone my ideal high would currently be in the 2021 area. SPX weekly chart:

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Last Thursday I was outlining the two main options for the current move as I see them. The first option is failure at 2010-20 resistance to make the second high of a double top targeting the 1800 area. The second option is that SPX breaks over that resistance and heads to currently theoretical channel resistance (from 1343 low), somewhere in the 2060-90 area. I said then that I favored the first option, but obviously we might see a break up into the second.

So where are we now? Well we haven't reached my resistance area yet, but we have a clear 70% bearish rising wedge established from the 1904 low, and increasing negative divergence on the 60min RSI 14, the daily RSI 5 and, always nice to see, the daily NYMO. We have a promising looking top setting up for that 2010-20 test, and the odds of a failure there are improving. SPX daily chart:

Possible High Forming

What this setup could really use here very soon though would be a test of rising wedge support on SPX, and yesterday's daily candle was promisingly bearish. I posted the chart showing the two main options if we were to see that retracement today on twitter last night and they are either, a 23.6% fib retracement to rising wedge  support in the 1987.5 area or, a 38.2% fib retracement to the 1979 area.to turn the rising wedge into a rising channel. The smaller retracement would be the more bearish on the next move up. After that retracement I'd be looking for a further move up to test strong resistance in the 2010-20 area, and then most likely failure there. SPX 60min chart:

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ES is well up overnight, and if that continues into trading hours, then there is an obvious target and significant resistance at the daily upper band, now at 2003 but possibly moving as high as 2005/6 on a strong open today. If that is hit and we see a strong rejection there that would then open up the daily middle band, currently at 1952, as a possible retracement target. SPX daily chart:

Some Retracement Imminent ..... Probably

There was some weakness/consolidation on Friday, and that did not hit the obvious trendline targets for a retracement. I have rising wedge support in the 1978 area this morning, and have added a scenario on the chart for a possible target in the 1974 area, as there is a nice confluence of support levels there. SPX 60min chart:

Some Retracement Imminent ..... Probably

I've included the NYA chart this morning as this may be a useful indicator early this week. The overall pattern on NYA is a very nice looking falling megaphone from the high, which is very likely to break up soon with a target at a test of the current all time highs. That's because as well as being a bullish leaning pattern, the megaphone also did a bullish underthrow at the last low. As long as NYA doesn't break up and make that target this morning, any retracement here is very likely to reverse back up afterwards to make that target. Obviously that megaphone may break up and make target today, in which case that reassuring unmade target would be lost. NYA 60min chart:

Some Retracement Imminent ..... Probably

On my RUT chart the short term double top setup that I was looking at on Friday morning is forming well, though I am concerned at the strength of RUT futures overnight. I still like the retracement scenario that I laid out on Friday morning, and the IHS currently looks unbalanced with a comparatively very small right shoulder. Have I seen IHSes like this break up and make target in the past? Yes, more than once. I'll be watching this setup carefully as a very strong and sustained break over the neckline on RUT today would be a big warning signal that equities may be accelerating to the upside. RUT 60min chart:

Some Retracement Imminent ..... Probably

Are we going to see a retracement early this week to test the support trendlines on the various US indices 60min charts? I think so, but short term such retracements are counter-trend of course, and if we are going to see a break past 2015-20 resistance in coming days/weeks then it might be that we would see those support trendline tests after that and obviously at a higher level. I'm more confident here that SPX will at minimum return to at least retest the highs after that retracement than I am that we see that retracement. I'll be watching the NYA and RUT charts for clues today, and will be actively looking for a decent looking short term high to short for a retracement today or tomorrow. That retracement may not happen however and that needs to be borne in mind here.

I did a weekend post on USD, EURUSD and bonds yesterday that has some long term charts that are well worth a look if you haven't already seen them. You can see that here.

Source: Springheel Jack

All seven of the IHS patterns that I've been watching since the lows last week have now made target apart from TRAN and RUT, and of those two, TRAN has come so close that if it failed here, I'd consider it a technical hit. RUT has barely made it out of the gate of course, but I have a theory about that I'll be coming to later in this post.

I also now have decent trend patterns for this move up on five of those US indices,  and passable patterns on the other two, so this move up has now taken form, and a retracement of some kind should be coming shortly.

SPX obviously made a new high yesterday, and that new high was not immediately rejected. If we see higher today, which isn't a given as all seven patterns have already hit their resistance trendlines, then the obvious target is the daily upper band, now at 2001. SPX daily chart:

Four Patterns and a Theory

Of the four patterns with decent (three touches) resistance trendlines in play here NDX is the most advanced as it actually broke down from the rising wedge there yesterday. This is the only pattern where the lower trendline is not taken from the actual low, and the obvious retracement target is to the rising support trendline from that low, currently in the 3995 area. NDX 60min chart:

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SPX made the IHS target at 1987 and is now close to testing the current all time high at 1991.39. I'm expecting to see a new high made, very possibly today. So what then?

Assuming that we don't see a strong rejection at the highs retest, the obvious next target just above is at the daily upper band, currently at 2000. I would very much like to see a decent retracement shortly, at the least to give me more to work with in terms of trendlines, and the obvious place to see that retracement start is now at a test of that daily upper band. On the bigger picture, if the rising wedge from the January low is still the main pattern here, then I would not expect this move to close a day back over rising wedge resistance, currently in the 2015 area. SPX daily chart:

Bigger Picture Options

In terms of the lack of retracements from the low last Friday, this is a problem because this may be telling us that this uptrend has much further to go. My primary scenario is still that SPX is making the second high of a double top, and as I mentioned above, I would be looking for hard closing resistance at wedge resistance in the 2015 area This wedge however is part of a larger setup from the November 2012 low at 1343.35, and looking at that chart, my primary scenario is only one of the two main options here.

The low at 1904 was a very good test of rising support from that November 2012 low. That has confirmed that rising support trendline as main support, and that should be the lower trendline of the current overall pattern. The options for that pattern are rising wedge, channel or megaphone, but I'm disregarding the megaphone option for the moment as I can't see any support for it, and working on the assumption that this pattern is either a rising wedge (my primary scenario) or a rising channel (my secondary scenario). Of these two I already have a decent rising wedge resistance trendline and that is in the 2020 area, along with the weekly upper bollinger band. That should be strong resistance and only on a conviction break above would I switch to my alternate channel scenario. The channel scenario has channel resistance currently in the 2060 area, but rising of course.

The trendline setup here strongly favors the rising wedge from the November 2011 low scenario, as the resistance trendline for that has already been established, but my alternate scenario has been gaining traction because of the strength of this move. We may see this move break up over rising wedge resistance in which case I would be moving over to the higher channel target. Either way it should be clearer what the likely outcome will be by the time we get close to the 2015-20 resistance area, as if I don't have a decent bear setup by then, we'll most likely break up. SPX daily chart from 2012:

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Another grinding day up yesterday, and the Dow IHS has also now made target. At this point, of the main US indices, NDX has made and far exceeded the IHS target there, Dow has just made the IHS target and WLSH has made the double bottom target there.

That leaves four of these main index bullish reversal patterns that have not yet made target. The first of those is the IHS on SPX. That came within six points of the IHS target at 1987 yesterday and could make that today if we have another grind up. SPX 60min chart:

IHS Update

The NYA IHS is also close to target and could make it to target on a strong day today. NYA 60min chart:

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The daily RSI 5 closed back over the 70 level and my RSI 5 / NYMO buy signal has now made target, now making that 16 of the 18 such signals since the start of 2007 to make that target, with the other two failing just above 60. The 50 DMA broke up with conviction yesterday and both that, now at 1958, and the daily middle band, now at 1952, should now be strong support. The next bollinger band target is in the 2000 area and I am expecting this move up to fail under rising wedge resistance, now in the 2015 area. The pattern setup here is suggesting strongly that on the bigger picture we are making the second high of a double top before a larger retracement coming sometime soon. SPX daily chart:

The 50 DMA Breaks Up

The IHS target on SPX is at 1987 and I am expecting that to be made as the minimum upside target here. SPX 60min chart:

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