- 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
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Thursday, 19 July 2018

Forming A Likely (Short Term) High

I was talking about on Tuesday about the likely short term high forming here and that process is now further advanced and possibly finished, though I think that the odds favor another short term high retest before the retracement that should follow.

Just to recap, we are expecting a short term retracement retracement to follow, lasting perhaps a week and taking SPX back into the 2750-70 range before another leg up starts that might carry SPX up to the all time high retest.

In the short term an hourly RSI 14 sell signal has now fixed and a daily RSI 5 sell signal is brewing. Key short term trend support is at the 50 hour MA, currently in the 2798 area, and if we see a high retest from here I'd expect that to be the second high of a small double top. SPX 60min chart:
Why am I looking for a short term high retest? Well there is the lack of a decent initial reversal pattern but there is also the setup on the RUT chart below with a clear bull flag wedge having broken up with a minimum target at the ATH retest not far above. That isn't a huge move but this is a reliable pattern and I'm expecting this to deliver. While the correlation between SPX and RUT is somewhat variable, a short term high retest on SPX is the obvious thing to see while this plays out on RUT. We'll see whether that delivers. Any sustained break below 2800 SPX would obviously throw this into serious doubt. RUT 60min chart:
Stan and I are doing our monthly free public webinar on the Big Five and Key Sectors an hour after the close tonight. This is looking at AAPL, AMZN, GOOG, FB, NFLX, TSLA & IBB, IYR, XLE, XLF, XLK, XRT. If you'd like to attend you can register for that on our July Free Webinars page.

Tuesday, 17 July 2018

Baby Steps

I was expecting a modest retracement in my last post and we have seen one. I was looking at the setup on the premarket video today and there is a probable short term low here testing support at the ES weekly pivot, open gap support on SPX and the 50 hour MA. We should see a short term higher high next and that will likely be setting up a larger retracement to follow. That's working out so far.

Partial Premarket Video from theartofchart.net - Update on ES, NQ:
On the bigger picture there are possible hourly RSI 14 and daily RSI 5 sell signals brewing and those I am expecting to deliver not too soon after a higher high for July is made on SPX. SPX 60min chart:
Wrap: