- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
- This blog has a copy of all header posts that I publish anywhere, so that those interested in seeing what my thoughts are on the markets can find them easily.
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Thursday, 20 July 2017

The Wheels On The Bus Go Round And Round

Apologies for the intermittent updates over the last couple of weeks. It's been very busy and I'm hoping to get back to posting every day again next week.

So another round of new highs and I read that the Vix has fallen to a 24 year low this week. There is an emerging consensus that equity indices will never drop meaningfully again and SPX and NDX are getting close to some big round numbers in the 6000 and 2500 areas respectively that are likely to develop a magnetic pull the closer SPX and NDX get to testing them.

So is it time to write off the bears altogether? Well we'll still likely see at least retracements when the setups are right for them and as it happens the retracement setups are looking pretty good right here, though to develop negative divergence on the daily charts we would likely see retracements and then marginal new all time highs on both before any larger move. Those marginal new all time highs, at this point, could test those big numbers at 2500 and 6000.

The move from the last low has formed a decent little rising wedge that has taken SPX to resistance on a decently formed larger rising wedge from the March/April lows. No negative divergence on the hourly or daily charts. SPX 60min chart:
The setup isn't as bearish on NDX, but there is a decent rising wedge from the last lows which is very steep and likely to need at least a retracement soon to establish a less vertiginously steep support trendline. NDX 60min chart:
The ES, NQ and TF futures charts below were done an hour after the RTH open for Daily Video Service subscribers at theartofchart.net. If you are interested in trying our services a 30 day free trial is available here.

On the futures charts the negative divergence here is much more encouraging. I updated these charts an hour after the open today as by then 60min sell signals had fixed on all of ES, NQ & TF.

ES has slightly overthrown wedge resistance on a decent rising wedge from the last low. In the event of a sustained break over wedge resistance I do have an alternate channel option with channel resistance currently in the 2490 area. ES Sep 60min chart:
On NQ there is a similar rising wedge, with the wedge resistance trendline somewhat weakened by two overthrows rather than just one. Again there is a decent alternate trendline above but if there hadn't already been a 60min sell signal fixed, another would have fixed this morning. NQ Sep 60min chart:
Decent looking rising wedge on TF too. TF Sep 60min chart:
This is a very decent looking retracement setup, probably not quite cooked yet. I'll be keeping a close eye on it.

Stan and I are doing the fourth webinar in our 'Managing Risk In Trading' series at theartofchart.net an hour after the close today, and if you would like to attend then you can register for that on our July Free Webinars page. This webinar is dealing with Stop Systems and Trade Repair. I would also note that this week's edition of The Weekly Call is posted and that the model portfolio there is up 170% in the seven months to June 23rd, obviously well on course to make our target minimum 200% return over the first year. As and when that target is reached we're thinking of making the strategy there a bit less conservative. That's a free weekly service and if you trade futures I'd suggest adding it to your reading list.

Monday, 17 July 2017

Looking For Some Retracement Here

NDX has made it over halfway from the break of the flag to the retest of the all time high, and I am treating that retest as the 70% likelihood option here. On the way though there is a lot of short term negative divergence that will likely deliver a retracement, maybe today but otherwise tomorrow. On NDX that may well require a retest of the short term high first. NDX 60min chart:
NDX has broken back above the H&S right shoulder so as well as the flag channel target back at a retest of the all time high, there is also a failed topping pattern / Janus flag target there, also at that retest. NDX daily chart:
Stan and I are thinking that we see a retracement from this area, then another leg up that at least retest's Friday's high before this move can finish. We are still leaning overall towards a resolution into a bearish expansion here, though we could obviously see the still looking less likely bullish expansion instead and that needs to be borne in mind. Either way, this retracement, if seen, should set up a decent buyable dip. SPX daily chart:
The ES, NQ and TF futures charts below were done before the RTH open for Daily Video Service subscribers at theartofchart.net. If you are interested in trying our services a 30 day free trial is available here.

So where might this retracement go? Well the usual target would be a test of the new weekly pivot on ES, which is at 2443. If the current short term high area holds then an possible extension beyond into the 2439 area to hit the 38.2% fib retrace target and the established support shelf there would be a real possibility. We wouldn't be expecting any sustained break below the weekly pivot. ES Sep 60min chart:
The new weekly pivot on NQ is at 5781.50 and that isn't tested as reliably every week, but is on the cards with the decent quality negative divergence on both the NDX and NQ hourly charts. NQ Sep 60min chart:
I wrote on the TF chart earlier that the all time high retest there might need to wait until after this likely retracement but TF just managed that at the high this morning,so of these three only NDX/NQ has an outstanding likely all time high retest still not completed. TF Sep 60min chart:
The short term high may be in and the retracement may be in progress already. If so the retracement has started off slow and choppy and may continue that way as well of course.

Stan and I are doing the fourth webinar in our 'Managing Risk In Trading' series at theartofchart.net an hour after the close on Thursday, and if you would like to attend then you can register for that on our July Free Webinars page. This webinar is dealing with Stop Systems and Trade Repair. I would also note that this week's edition of The Weekly Call is posted and that the model portfolio there is up 170% in the seven months to June 23rd, obviously well on course to make our target minimum 200% return over the first year. As and when that target is reached we're thinking of making the strategy there a bit less conservative. That's a free weekly service and if you trade futures I'd suggest adding it to your reading list.