- 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.
- I will be answering questions and responding to comments, so feel free to respond to any posts and I will see your comment even if it is not on the most recent post.
- If you're interested in seeing any intraday charts I post, I do that on twitter, and my twitter handle is @shjackcharts.
- The charts in the posts are as large as I can practically make them. if you would like to look at one more closely, click on it, and the link will take you to a larger version at screencast. If you click on that again, you will get a full page version, and can use the resizing function on your browser to enlarge parts of interest further.

Thursday, 30 September 2010

Stalled under 1150 SPX

SPX has just been drifting sideways this week really. I've been looking for anything in the way of short term patterns but haven't found much. We do have a fairly solid looking declining resistance trendline though and that is worth noting. Here it is on the ES 60min chart:

I'm beginning to think that we may see the next significant interim top here rather than in the 1170 - 1180 area. I've a couple of reasons to think so. The first is that we have been stalled here a while, and now that 1130 SPX has broken, this is the last really significant resistance level on SPX below 1200 SPX. Looking at the SPX weekly chart we're also at a significant level on the weekly RSI.

During the October 2007 to March 2009 bear market, RSI on the weekly chart never rose above 55. When it did rise above it in June 2009, to about 58, it was a signal that the bear market was over, and it was also the level of a significant interim top. We may be seeing a similar signal now, on both counts, though the move down over the summer didn't quite make the 20% decline necessary to qualify as a cyclical bear market.

The second reason I'm wondering about a significant interim top here is that while SPX has been stalled below 1150, USD has kept falling, and emerging markets have kept rising. I've been watching a rising wedge on the EEM 60min chart and we are now almost at the next likely reversal level. This is a key chart for overall market direction and you'll note that EEM bottomed in May rather than July, leading the SPX and indicating that the SPX summer decline wasn't likely to last. Also worth noting on this chart is that EEM has now exceeded the April high:

Vix bottomed a while ago and I have a sloppy rising channel on the 30min chart:

Looking at oil, I'm seeing a likely rising channel with the lower trendline of the previous rising channel as the upper trendline of the new channel. If so then the next upside target is in the 79.6 area, though as I write oil is stalling at the previous September high at 78:

Today is the last day of September and of the third quarter. The Stock Trader's Almanac says that this is generally a day of institutional portfolio window dressing and heavy selling, with the Dow down 8 of the last 12 years. There was a 4.7% rally on 30th September in 2008 though, so this isn't necessarily a down day of course.

Wednesday, 29 September 2010

Bull Market In Money

I'm not really seeing much on ES this morning. We've just been chopping around uncertainly so far this week and that could continue today. I have some some trendlines on ES that are showing more short-term potential downside than upside so I'm cautious on the long side right here. If ES can break 1150 then 1170 looks likely, but that's still an if so far, and we are stalled under the SPX January high for the moment. Here's the ES 15min chart:

Looking around the world there are some big indices that don't look that bullish at the moment. On the FTSE we've actually been in a declining channel for the last couple of weeks. Currently the FTSE is in a small triangle and a break from that may give a direction for the next few days:

Unlike the FTSE, the EUR DAX futures chart hasn't even yet exceeded the August high. I'm seeing a rather larger triangle there:

One thing that is definitely making me wonder about the strength of this bull move in equities is the recent strength in 30yr treasuries. Looking back over the last year and a half there is no doubt at all that these tend to trend down when equities trend up. QE may moderate that effect to an extent and cushion the fall, but it has not made them rise at the same time.

It is strange then that long treasuries have been so strong in recent days, and I'm considering the possibility that these might be in a rising channel. I've put three possible resistance trendlines on the chart and the next peak should indicate which one is the right one.

As ever, the many silver and gold bears are being taken to the cleaners. I had thought that silver might find resistance at the 2008 high, but it was broken last week and if reached soon, I'm seeing channel resistance in the 23.75 area. If this move takes longer, and is as long as the last big wave up then it might go to 25.25 before the next interim top:

Looking at silver, we have a very healthy bull move going there. What is persistent strength in precious metals telling us? Only that precious metals look a better store of value than fiat currencies. Central bankers inflated a series of bubbles with low interest rates and easy money, and when that led to a crash, they have stepped in to fix the problem with even lower interest rates and a flood of money printing. Who says you can't teach an old dog new tricks?

Ben Bernanke has told us that he will print whatever quantity of money is needed to revive an economy already sick from repeated previous overdoses of easy money, and we all believe him. The bull market in precious metals may go a lot further yet.

Tuesday, 28 September 2010

Looks Like Consolidation So Far

We saw a small move down on SPX in trading hours yesterday, and a sharper move overnight, but this just looks like consolidation so far. If it is consolidation then the support trendline on ES, currently at about 1125, should be respected. That's also the level of the SPX IHS neckline of course:

Bonds have bounced sharply in recent days, and we've seen a perfect 50% retracement of the recent move down on 30 year treasuries. If equities are to rise much further then I'd expect bonds to fall, so these are looking like an interesting short here:

We're seeing some sideways consolidation on USD as well, and on USD, from a technical perspective at least, there seems little reason to expect a bounce in the near future. Looking at the USD currency pairs I'm seeing possible three drives patterns on EURUSD and GBPUSD with the first two drives completed.

Classical three drives devotees will have to forgive my not having been particularly concerned about the fibonacci retracements after the completion of each drive, but the essence of this pattern for me is the formation of three drives of almost equal size. We have that on both of these, and on EURUSD that has formed so far within a broadening ascending wedge:

On GBPUSD we've had two drives within a rising channel. The recent drive has formed a broadening ascending wedge which gives us a rising support trendline currently slightly over 1.575:

These have been big moves on both of these USD currency pairs and if we see a third drive on each then I'd expect that to be in the context of a move up on SPX taking us to the 1175 area. If we are to see that then I'd expect us to chop around today with a slight upward bias before moving up towards 1175 on Wednesday and Thursday this week. If ES breaks support today then I'm doubtful about seeing any move much below 1125 SPX and I'd expect the retracement to conclude by Thursday.


Since writing this ES has bounced back up to 1142.25 and found resistance there. In doing so it has confirmed today's pattern, which is a little broadening descending wedge. I'm expecting us to continue to trade within this until, most likely, it breaks up, which will be a strong signal to go long. Here it is on the ES 15min chart:

Monday, 27 September 2010

Buy The Dips

Friday was a very good day for the bulls and a number of key support and resistance levels fell that suggest that we've a lot more upside coming. After the slight break back down through the SPX IHS neckline on Thursday it was weakened, but not greatly so, and the neckline was recaptured with a lot of confidence on Friday. On the 60min chart we've now established a support trendline to go with the already established resistance trendline. Together they look like a rising wedge, but there aren't enough crosses between the trendlines to make it one really:

Copper has broken upwards from the rising wedge and well established resistance trendline and the rising wedge target is 397, which fits with the two alternate resistance trendlines that I've marked on the chart. This break could possibly still be a wedge overthrow, but I wouldn't put any money on that:

USD has now broken down from both the H&S neckline and the support level that I marked in on Friday's chart. The next obvious targets for EURUSD and GBPUSD from their charts are in the 1.375 and 1.595 areas respectively so I'm not really seeing much reason for a bounce here:

Oil broke declining resistance and the H&S that was forming now looks unlikely to finish forming the right shoulder. Oil's probably the weakest long here with the high stocks position looking likely to be a drag on any move up:

Financials are often a good indicator for equities and I've been looking at the XLF chart over the weekend. That also looks encouraging for bulls, with a falling wedge that has broken up and retested, and a smaller rectangle bottom that has formed at the bottom of the falling wedge. Rectangle bottoms, despite the name, break down 55% of the time, but this one looks likely to break up under the circumstances. On an upward break this has an 85% chance of reaching the target at 16.8. The falling wedge target is 17.05:

All in all the technical picture overall looks very bullish now and the best strategy here looks likely to be buying on weakness. We may see some weakness this week and I'm seeing a big move today in one direction or the other. If that move is down then it is likely to set the direction for much of the week. If that move is up then I'm seeing strong resistance in the 1161 - 1165 area today.

Friday, 24 September 2010

Mixed Picture

I've been having a careful look at the overnight action this morning and, at best, we are looking at a very mixed picture.

On the bear side on the bigger picture the Gann guys have been talking about this week as a likely key reversal week, and while I know some don't take them seriously, I've seen them be right so often in the past that I always watch them carefully. Any key reversal here would seem likely to be downwards so far, though if we saw a big decline today then it could possibly be up.

On the chart side SPX has faltered before reaching 70 on the daily RSI, which is so far failing to confirm a change in trend to bullish in my view, and the daily RSI has broken the recent rising support trendline, which is bearish. The obvious target is the support trendline on MACD which I'll be showing in my SPX daily chart below, and that would suggest a reversal towards rising support from the July low in the 1060 area.

Financials across the world also look relatively weak, and longer term the US economy is being forced down the rabbit hole by well meaning but short-termist policymakers, which doesn't give much confidence on the bull side for equities longer term. My personal assessment of the odds that we started a new secular bull market in 2009 puts those odds close to zero, though we have definitely been seeing a cyclical bull market since within the overall secular bear market, and that cyclical bull market may not have peaked yet.

On the bull side USD has faltered badly under the repeated recent assaults from the Fed, and may well soon confirm and strengthen the current downtrend by breaking a key support level at 79.63. That is traditionally bullish for equities. Copper is also in a strong uptrend and if the current rising wedge breaks up, will soon make a new high for 2010, which would also look bullish for equities. SPX broke back below the SPX IHS neckline yesterday though, which while it doesn't invalidate the pattern, makes it less likely in my experience that we will see it play out. A close much below yesterday's would weaken it further.

Here's the SPX daily chart and I would draw your attention to the RSI and MACD as there is a  distinctly bearish short term message there.

USD has been very weak overnight and as I said, we are very close to key support now, as well as significantly below the neckline of the scary looking but uneven H&S pattern:

On copper we have a very nice rising wedge on the daily chart that is showing some signs of breaking upwards. I've put this wedge in the context of the larger picture. as and when we get a break from the wedge on a daily close basis I will be regarding that as a very significant indicator of where SPX is headed next.

Back in the short term though, ES fell sharply yesterday in the pre-market and then rallied to touch declining resistance before falling back to support again. That was good short-term bearish action and unless we see a break of that resistance trendline I'm on the short side today. We should know soon as I am watching that trendline being tested while I write.

If that trendline breaks on an hourly basis, I'll be a lot more cautious about shorts today and will be watching the thinner declining trendline a little above it. If that breaks even for a couple of ticks then I'll be out of shorts today altogether. The main decline trendline is slightly under 1128 ES at the moment and the higher ttrendline is slightly under 1130 ES. Add 5 points for SPX of course. Here's the ES 15min chart:

I'm expecting a significant move today, probably downwards. If this resolves down I'm expecting at least a test of gap support at 1110 ES, but my preferred target is 1099 ES. If declining resistance breaks then I'm expecting a move that may well be capped at 1140 ES, but could make it as far as 1155. If the higher target is hit then I'm expecting a reversal on Monday that would reverse most of the gains today.

While I've been watching ES has broken up through both of my short term declining resistance trendlines and I'm therefore very doubtful about the short side today. There is still some possible resistance at the lower trendline of the broken wedge at 1132.75, but that's already been tested once from below. A second test suggests that it is breaking up.

I'm out for most of the trading day today at my younger son's birthday party so everyone have a great weekend.

Thursday, 23 September 2010

ES Breaks Support Overnight

Well the big news today is obviously that ES broke support overnight and that a retracement has started that should take us through today and tomorrow. I've marked the main targets on the 60min chart:

The first key target to fall was the IHS neckline at 1125 ES and that has been broken on an hourly close basis. That makes a visit to gap support at 1110 ES likely now, and if that gap can be filled then the wedge target is 1099 ES. Add 5 points for the SPX figures of course.

This is a very interesting development technically as a conviction break of and close below the IHS neckline will weaken that SPX IHS considerably, and that's what I'd like to see in trading hours today.

On USD we saw a return to the H&S neckline yesterday and an intraday move below it. USD is still in a strong downtrend but the odds of seeing a decent bounce here are pretty good:

On copper there was a strong move up yesterday within the recent rising wedge. I played around with the lower trendline a bit yesterday night and this is a very good quality wedge. On a break below the wedge I would expect to see a return to rising support in the 325 to 330 area. On a break above I would expect to see a move to rising resistance in the 390 - 400 area:

Oil is testing the recent support trendline, and with the drop on ES / SPX I'm expecting to see that support break and a return to the H&S neckline just over 71:

I'm expecting that we may well see a big move down on ES by the end of the week, probably tomorrow, and I'd put the chance of seeing an 1100 ES retest by then at about 50%. At the moment I'm expecting that to be followed by a move back up next week.

Wednesday, 22 September 2010

Waiting for USD Confirmation

I'm still not 100% sold on the bullish scenario here. It is looking very good, and has to be the primary scenario until proven otherwise at this stage, but looking around at the already bombed out economy and at our fearless leaders dropping ever more fiscal bombs on it from their helicopters it is hard to feel very optimistic about the future of anything at this stage other than precious metals.

If current political and financial leaders in the US in the US have a creed to operate by it is that 'if it isn't working, try doing more of the same'. They've been saying the same in Japan for twenty years without doing anything other than making default in the next few years seem a likely prospect, and I can imagine that lemmings, if they could talk, might be saying the same as they widened and deepened their cliff-diving strategy.

Equally I hear a lot that Bernanke and Obama must know what they're doing, and will therefore be proved right in the end, because there's no way that they could possibly drive the US economy off a longer term cliff in the way that they appear to be doing. I've read a lot of history and economic history though, and that's unfortunately simply untrue, as few things are as well demonstrated historically as politicians' penchant for doing exactly the wrong thing from a confused mishmash of good intentions, ignorance, and short-term expedience, and of the tendency of large numbers of eminent economists to recommend exactly the wrong action in a crisis situation. As Ronald Reagan said, the scariest words in the world are 'I'm from the government, and I'm here to help'.

Fortunately, for the next few months at least, independent confirmation is available. The SPX IHS has broken up, and that has made the main bull case for equities here, but for confirmation we have the big H&S pattern on USD, and when we see a close below the neckline at 80, I'll be taking that as the green light that we are very likely indeed to see 1250 SPX in the next few months.

I had thought we would see a test of 80 on USD in the SPX 1170 area, but I reckoned without the almost magical power of Bernanke to wither the US currency, and after his strong commitment to inflationary policies yesterday USD has plunged to the 80 neckline. We will see if it holds, but if we see a close below it then I'm going to write off the bear case until we reach 1250 SPX at least:

On EURUSD we see the IHS target at 1.325 made after Bernanke spoke yesterday and then the August high at 1.333 broken overnight. I'm seeing a likely trendline target just under 1.34. I've marked it as slightly over 1.34 on the chart, but it looks as though EURUSD may make it to target before the markets open today, which is faster than I was expecting:

GBPUSD has been underperforming EURUSD recently, and the IHS and channel target at 1.586 target looks like a stretch from here. I'm not expecting to see that made before the next pullback. Note however the series of channels that GBPUSD has evolved through as it has reversed in a rounded bottom. A very big pullback looks doubtful here:

30 year treasuries made the second low of a double bottom yesterday and bounced powerfully. If equities are going to rise strongly over the next few months then this rally looks doomed, but we could see a strong retracement and I've marked the most likely retracement targets if they can get over 133:

USD may have crumbled since Bernanke spoke, but we saw no big move up on SPX, which has continued to respect recent overhead resistance. USD is likely to bounce here I think, and if so, then the chances are that SPX will be retracing for the rest of the week. SPX also has a strong recent support trendline that I've marked the chart and if SPX can break back below the IHS neckline at 1130 then we are likely to see a retracement to at least the gap support at 1115 SPX. A break below the IHS neckline would weaken the case that the IHS will play out somewhat and we may well not see it as 1130 SPX should now be strong support:

One interesting pattern I was looking at yesterday was a possible bearish gartley pattern on SPX with the next upswing target in the 1175 SPX area. I was thinking that a move there, and with resistance from the May high at 1173 in the same area, might coincide with USD hitting 80, but clearly that won't now happen. Interesting chart though and thanks to Keirsten for posting it at TTW:

If we are going to see an equities retracement from anywhere near here, then retracement here and now looks most likely, and there is some support from copper for that view. Copper has been struggling to break resistance at 352.2 convincingly for most of September, and looks ripe for some retracement here:

I don't see much hope for the bears here on balance, but if we are going to see a turn then the bears' best chance for a serious reversal is with the USD at 80, and we have that today. We are likely to see at least a short period of SPX weakness here and that could develop into a deeper reversal. Once USD closes a day below 80 though, then in my view at least, the bear case will look dead for the time being, and it will be too dangerous to short this market for anything but short term counter-trend reversals.

Tuesday, 21 September 2010


There have been a lot of indications in recent days that the summer range on SPX was likely to break up, so it wasn't a surprise that it has, but the timing is very bad, as it has happened without the expected retracement and buying opportunity from the 1130 SPX area, and now that SPX has broken up, there is a very significant chance that SPX will break up further to a level where a retest of 1130 SPX would be the retracement target.

The IHS target on SPX is 1250 of course, and as we're taking the bull road, we are also likely to see a new low on USD, going beyond the wedge target on EURUSD in the 1.46 to 1.50 area. I'll do a broad review tomorrow of the main bull patterns, and it isn't a pretty picture from the bear side.

Here's the IHS on SPX with the two main overhead resistance levels at the Jan and May highs marked:

I've been looking at quite a few indices around the world this morning. The UK's FTSE index sprang to the eye, as there we saw a break of the neckline of an upsloping IHS a few days ago, and the neckline was retested yesterday:

Short term on SPX the rising wedge from the low has run out of road, in that the upper and lower trendlines have now crossed. The upper trendline was touched again yesterday, and has still not been broken, though the ES version saw a significant pinocchio through yesterday. Given that the trendline is rising at over three points a day, and therefore at 60 to 70 points per month, I would not normally expect to see it break, and SPX already looks overbought on most timeframes. We shall see if it holds today:

I was looking at my indicators and my SPX:Vix wedge still has some upside ground to cover before we see another touch of the upper wedge trendline. I am hoping that this will identify the next significant swing top, though if so, I'm thinking that looks to be in the 1170 area:

The big wild card today is the Fed meeting of course, and the bears' big hope for a retracement here is that Bernanke will announce that the Fed is taking no immediate action, and that the disappointment that there will be no big QE2 will pull the market down for the rest of the week. I think that could well happen, as the argument for supporting equities has been greatly weakened by equities already breaking upwards without any formal announcement of support.

I say support of equities rather than treasuries as that is the effect, and probably also the intention, of quantitative easing. The effect is to boost equities while putting a floor under treasuries to cushion the fall that would be expected while equities rise. It is no accident that equities peaked and bonds took off in April just after the end of the last major quantitative easing push in March.

Looking again at the 30 year treasuries yield chart, the positive correlation between equities and yields, and therefore the negative correlation between equities and bonds, could not be much more obvious. If equities are to rise to new highs now, which looks very likely, then the bond rally is over, and I see overnight that 30 year treasuries are retesting the lows of recent days. Best case in the event that there is to be a significant new QE push is that bonds fall gently. If there is no QE2 at all, they look likely to fall a lot:

Monday, 20 September 2010

Historical weakness after September opex

I've been giving likely market direction from here a lot of thought over the last few days and zstocks kindly threw some stats my way over the weekend.

The first stats fit my thoughts for this week very well, with the stats from the Stock Traders Almanac saying that in the week after September triple witching Dow has been down seven out of eight years since 2002. I am expecting to see that become eight out of nine this week, though obviously we have a major wild card in the Fed meeting tomorrow.

We've seen a short term divergence on the Vix, and a rising Vix frequently signals a short term top:

The rising wedge on the SPX 60min chart has also broken downwards and I have eliminated the option of it breaking up to form a steeper declining channel as a result. The blue dotted trendline gives the target area this week if we are going to see this rising wedge turn into a rising channel:

The Emerging Markets futures chart that I posted last week shows these, often an excellent leading indicator, are leading the way down towards the big rising wedge lower trendline, which I'm expecting to see hit this week:

Longer term the picture is looking more bullish. We've just had yet another cross of the 13/34 weekly SPX EMAs, the fourth in recent months, and while this has obviously not been a reliable indicator this year I'm not expecting to see it cross again in the near future. At four crosses this is already more crosses than we've seen for any year in the last thirty years:

McHugh posted an interesting analysis of what he described as Autumn declines on the Dow which you can see here, but the dates he was using seemed rather fuzzy, so I had a look myself at the four month period at the end of the year for the last 20 years and came up with this rough and ready summary:
  • 2010 - Up ~5% at 20th September
  • 2009 - Up ~11%
  • 2008 - Down ~25%
  • 2007 - Down ~1%
  • 2006 - Up ~9%
  • 2005 - Up~3%
  • 2004 - Up ~6%
  • 2003 - Up ~10%
  • 2002 - Down ~3%
  • 2001 - Up ~1%
  • 2000 - Down ~4%
  • 1999 - Up ~4%
  • 1998 - Up ~15%
  • 1997 - Up ~1%
  • 1996 - Up ~7%
  • 1995 - Up ~10%
  • 1994 - Down ~2%
  • 1993 - Up ~3%
  • 1992 - Up ~2%
  • 1991 - Up ~4%
  • 1990 - Up ~1%
In the September to December period therefore we have seen rises in 16 out of the last 20 years, with five rises of 9% or more, and only one decline of more than 4%. That fits with my expectations because we are coming towards the close of the traditionally weak period of the year and the fourth quarter as a whole is traditionally fairly strong.

Have the bears therefore missed their chance this summer? I think so, we've traded sideways rather than down after the declines in late April and May, and looking at this most recent peak compared to the last 1130 test on SPX, I'm seeing a lot of indications that regardless of what happens this week, we're likely to see more upside after that. Pug's been looking at a new count that sees the action since the April peak as a corrective fourth wave and that fits my expectations for the next few months well, with a fifth wave having started at the July low and likely to take us to a new high on SPX before a deeper retracement next year. Alphahorn also thinks that is very possible and that is both of the EW analysts that I look at often, though Alphahorn thinks a deeper move down here is also very possible.

We'll see how it goes this week. If we are going to break decisively above the 1130 SPX IHS neckline after this week then I would expect that the strong support level in the 1085 - 1090 SPX area will hold, and if we get there I'll therefore be seeing that as a good buying opportunity.

In the very short term we're seeing some strength on ES this morning, and that may be sustained for much of today. On the ES 15min chart I'm seeing strong resistance in the 1137 area, though I doubt we will see ES rise that far, and the lower blue trendline shows short term rising support, currently in the 1119 area. A break of that would indicate strongly towards a test of gap support at 1110 ES:

Of the other charts I'm watching copper is at resistance in the 352.5 area again, GBPUSD, EURUSD and AUDUSD are all within last week's trading ranges, with AUD near the top of that range and GBP near the bottom. Oil looks interesting, with a fall to rising support on Friday. If we see the SPX weakness that I am expecting this week then I would expect a fall to the H&S neckline at 71, and as the fundamentals and stock levels on oil suggest relative weakness we could see that pattern play out regardless of what happens elsewhere over the next few weeks:

Friday, 17 September 2010

Bullish Breaks

Resistance broke at the ES IHS neckline overnight which was very bullish, though it remains to be seen whether we now run up quite a way further or fall back before the neckline is also broken during trading hours. There has been a lot of talk about SPX being overbought here. That's true on a short term basis but we're not yet overbought on the daily RSI of course:

There is still some chance that resistance might hold short term in the ESZ0 1132 - 1135 area today. I have a resistance trendline from 1075 on the 15min chart that has been tested four times previously and held. It has been tested hard in the last couple of hours but has held so far. If that ES resistance trendline breaks I'll be considering resistance levels in the 1145 to 1175 area:

On 30 year treasuries the rising channel has now definitely broken down, which adds to the bullish picture on equities:

EURUSD and GBPUSD made significant gains overnight but I won't repost the charts today as I've little to add to yesterday's comments. CADUSD broke resistance at 97.6 and the next obvious target is the rectangle top at 98.65:

The Yen is looking interesting for a change here. I don't normally chart JPYUSD as it doesn't tend to hold trendlines well but a major resistance area is being tested and we could be seeing an IHS form:

Looking at the USD currency pairs I'm definitely thinking that the next obvious support for USD is at 80 as I posted yesterday, and if we are seeing a move there at the moment then ES / SPX could definitely run higher. I'll be watching resistance on my ES 15min chart but if it breaks, then I'm not seeing any obvious reversal level below 1150 SPX really.

What's worth noting at the moment though is that we don't yet have a break of the IHS neckline on the SPX daily chart. If we see a reversal below it before the market opens then there is still a significant chance of a short term reversal here. We are most definitely short term overbought. If we gap up above the neckline at the open though I'll be expecting to see a further run up in the next day or two.

There are a couple of external factors to note here. Firstly it is quadruple witching opex today, and the market often trades in a narrow range on such days. Statistically that does also leave us with a traditionally bearish week next week though all eyes will be on the Fed next Tuesday, when they will either announce the heavily trailed new QE push, which would be bullish for equities, or they won't announce one, which at this stage would disappoint a awful lot of people.