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Tuesday, 22 May 2018

Still Minding The Gap

SPX is still testing the open island top gap from the March rally high, and that has been solid resistance so far. My lean is that SPX will likely break up through that within a day or two, but there is now a clear alternate downside scenario shown on the SPX hourly chart below. Partial Premarket Video from theartofchart.net - Update on ES, NQ and TF:
The downside scenario here is a possible nested double top setup. A possible hourly RSI 5 sell signal is brewing and will fix on any significant further downside. In terms of the pattern setup the first serious support is rising channel support now in the 2726 area. As it happens the smaller possible double top support is also at 2726, and on a break below the first double top target would be in the 2710 area. That is a decent match with possible trendline support on ES is the 2712 area. The larger double top support is at 2701.9, and a sustained break below would look for 2661.5.

On the downside scenario, with ES and SPX trading at roughly the same level at the moment, support on the way is at the weekly pivot at 2718.9, and the daily middle band, now in the 2688/9 area. SPX 60min chart:

Monday, 21 May 2018

Mind The (Island Top) Gap

I was concerned on Thursday that SPX would fail to do the obvious second leg down on the likely overall bull flag forming here, and in all likelihood SPX has now broken up from that bull flag. Confirmation that SPX is going up directly comes on a fill of the open island top gap from the mid-March high at 2752.01.

I'm leaning against another leg down here but if the bears are going to have (yet) another try at that, then first support is at the ES weekly pivot 2718.25 (same area on SPX), then a break of rising support from the mid-May low, now in the 2712 ES area.

I uploaded the full premarket video this morning by mistake, so this is going to be the full version that I post this week, as I try to only post one of those each week. Full Premarket Video from theartofchart.net - Update on ES, NQ and TF, and CL, NG, GC, HG, ZB, KC, SB, CC, ZW, DX, EURUSD, GBPUSD, AUDUSD, NZDUSD, USDJPY, USDCAD:
One thing I look for in a situation like this, when a break up or down is happening earlier than expected, is whether a high quality pattern might be forming, and indeed a high quality rising channel has now been established from the 2594 low. Channel support is now in the 2714/5 area, and if that holds then I'd note that channel resistance is now in the 2790 area. SPX 60min chart:
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