- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
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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.

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