- 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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Tuesday, 21 August 2012

Euro Rising Wedge

Well the big news yesterday was that EURUSD held the lower trendline of the now established rising wedge there and broke up to test the current rally highs. I have a W bottom target at 1.25. I'm not wild about the short retracement into that pattern but rising wedge resistance is now in the 1.256 area so that is supporting the W bottom target. Short term the 60min RSI is VERY overbought so we might see some consolidation or retracement:
Rather than SPX I'm going to show my main ES 60min chart today. There you can see the main rising channel from the June low and the shorter term trendlines, as well as the obviously weakening momentum shown on the 60min RSI. I have a very short term support trendline in the 1413.5 area, rising support from the late July low in the 1404 area, and main channel support in the 1356 area. Overhead I have a resistance trendline 1422-3 and main channel resistance currently at 1435:
Looking at TLT I'm seeing a bullish broadening descending wedge form. From the last low a sloping IHS may be forming that could take TLT back to test broken support 123.5 to 124, but would most likely fail just over 123 at broadening wedge resistance:
Looking at other equity markets I am seeing a couple where there is serious resistance here. On the equal weighted SPX chart I have rising channel resistance being tested:
On EEM I have the same, slightly further along, together with gap resistance, sharply negative 60min RSI divergence and a broken support trendline. Short term EEM looks very toppy:
As I've been saying for a while, I think there's a very decent chance of seeing the 1440 area SPX pivot tested and that's the next big resistance after the April high at 1422.38 gets taken out, and it looks as though that may happen at the open. I am expecting the next swing high in the 1420-1445 SPX area, and that could be a very major swing high, depending on what happens after that. We shall see.

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