- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
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Thursday, 6 September 2012

ES Triangle Breaking Up

On SPX the middle bollinger band was tested yesterday and held as resistance. The upper bollinger band is in the 1419 SPX area today so I'd be surprised to see a move over 1425:
ES tested the upper trendline of the descending triangle overnight and then broke up through it. If this holds into real trading hours and the declining resistance trendline on SPX also breaks then I would expect more upside. The triangle target is 1432.50 with an 84% chance of making target according to Bulkowski:
I posted an SPX chart last night on twitter showing the possible H&S setup there and the declining resistance trendline from the last high. That's the trendline I'll be watching this morning and if it breaks up then I would regard the ES break up as confirmed. I'm being a little cautious here as in my experience triangles are very prone to false breaks:
On TLT we are seeing a retest of the IHS neckline. The neckline has not yet been reached though and it might well be before this retest is complete:
I noted the positive divergence on the CL 60min RSI yesterday and that has delivered a strong bounce that has rebroken the now extremely porous rising wedge support trendline. Overall this still looks bearish but we could see a retest of the highs from here:
EURUSD broke back up to a marginal new high overnight after more talk from Draghi about bond purchases by the ECB. That's not a done deal yet, with the Bundesbank strongly opposed so far, but he might deliver it. EURUSD needs to build on this break though as marginal new highs are bearish if not followed through. From a technical perspective EURUSD has now risen enough to threaten the USD uptrend. On my 5yr DX chart the rising support trendline from the lows on DX is being tested hard. Historically, on a daily close below that trendline the USD uptrend would be over. That's a significant game changer so I'm watching that closely:
I'm leaning long today on the break over triangle resistance on ES. Once that is confirmed by a break over declining resistance on SPX in trading hours I will be leaning strongly bullish. I won't be around much today as I have a bad cold.

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