- 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.

Tuesday 5 February 2013

Topped or Topping

ES and SPX broke the current uptrend with a lower low yesterday. On ES this was a momentary break below 1491 support. We're seeing a strong bounce at the moment, signaled by RSI divergence and a W bottom on the ES 60min chart at the low yesterday, but the chances are that an interim top is now in or being made. An H&S may also be forming:
Why does this look so significant? Well I mentioned a couple of weeks ago and last week when we were seeing potential topping setups that there was no negative RSI divergence on the SPX daily chart. That is no longer true. On the chart below there have been three instances since July 2011 where there has been clear negative RSI divergence from overbought on the daily chart and the smallest of those retracements made it to the daily lower bollinger band, which is now in the 1445-50 area:
On the SPX 60min chart the rising support trendline from the November low is the obvious target on a decent retracement. That is also now in the 1445-50 area, and could be the lower trendline on a bearish broadening ascending wedge that may be forming on the SPX chart:
Is there any support for this from other indices? Yes. There are similar divergences on the Dow, RUT and Tran charts. Nothing on NDX but then it has been too weak for the daily RSI to get back over 70. What we do have on NDX however is a perfect double-top that broke down yesterday with a target in the 2670 area. There is possible support on the way at rising support from the November low in the 2685 area:
EURUSD made the double-top target yesterday and reversed off support just under 1.35. Short term rising support was broken and we may well see more downside after the oversold bounce:
CL didn't make the double-top target in the 95 support area but did break rising support from December. Again an interim top may be in though I'm wondering about another possible test of 98 area resistance which would be a nice looking short entry if we see it:
The setup on equities here has me leaning strongly swing short here. Immediate resistance on ES is in the 1501 area at the 50 hour MA, and that's holding at the moment. It may well continue to hold. If we see a decent break above we might see a retest of the highs and I'd be looking for the second high of a double-top there. Either way this is by far the best short setup that we have seen so far in 2013, and historically it should deliver a 50 point or so retracement, and perhaps more. Sell the rips.


  1. I rеad thіѕ рost completely about thе diffeгence οf latest and ρгесеԁіng tеchnologies,
    it's remarkable article.

    Take a look at my homepage: search engine rank checker

  2. Very descrіρtіѵe blоg, I lоѵeԁ that a lot.
    Will theгe be a part 2?

    My ωeb ѕite :: http://soundpla.net/user/stjmwzzgm

  3. This iѕ a topіc whiсh is near to mу heагt.

    .. Cheers! Where are your contaсt dеtailѕ though?

    Stop by my ѕitе sickseo.co.uk

  4. Very gοod pоst! We will be linking to
    thiѕ ρartiсulaгly great article οn ouг ѕite.
    Keep up thе great writing.

    Mу web blоg; www.rodinberch.de

  5. Hello! I could have sworn I've been to this blog before but after browsing through some of the posts I realized it'ѕ neω to me.
    Regardlеss, I'm certainly pleased I stumbled upon it and I'll
    be book-marking it anԁ chеckіng back

    Visit my weblog: linkchecker

  6. Kеeρ thіs gοing plеаѕe, grеat job!

    Hегe іs my ωеbѕite:
    My web site: HTTP://www.Welovenet.com/zenphoto/c...

  7. Whаt's up, just wanted to say, I liked this post. It was practical. Keep on posting!

    My blog post: yeast infection baby girls treatment
    my webpage - crawlmyass.co.uk

  8. Thіѕ pаragraph will assist the internet
    viѕitors foг building up new ωeb sіte οr eνen a weblog from start
    to еnd.

    Take a look at my sіte; crawlmyass.co.uk

  9. Ηi, i read your blog οcсаsionally and i own a similаr one anԁ
    і was just ωondering if уou get a lot οf sрam comments?
    If so how do you pгevent іt, any plugin or anуthing you can гecommend?

    I get so much lately it's driving me insane so any help is very much appreciated.

    Take a look at my web page: http://www.serviceandrentals.com/blogs/user/ShelbyOMVO
    my website > sickseo.co.Uk

  10. Heу thеre! I sіmply would lіkе to give yоu a huge thumbs up fοr thе grеat іnformаtion уou have
    here on this post. I'll be returning to your web site for more soon.

    My web page - Highly recommended Site

  11. It is рerfect time to make some plans fοr the futurе and it іs time
    to be hаppy. I've read this post and if I could I wish to suggest you some interesting things or suggestions. Maybe you can write next articles referring to this article. I desire to read even more things about it!

    Have a look at my website: http://naturalhealthcures.co.uk/cure-hemorrhoids/