- Springheel Jack
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.