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Wednesday, 28 August 2013

Testing Serious Support

SPX closed yesterday back at the daily lower bollinger band. I'm not expecting another strong break below the lower band at this stage so if the band is respected we are unlikely to see SPX close significantly below 1621/2 today. Worth noting as well are that SPX declining channel support and rising support from the 1343 low are in the 1623/4 area, and that the 23.6% retracement of the full move up from 1343 is at 1623.22. This is a very significant support confluence near where the SPX daily lower bollinger band is likely to end the day. SPX daily chart:
On the SPX 60min chart channel support looks marginally higher in the 1625 area and hasn't yet been hit. SPX 60min chart:
On the ES 60min chart I have channel support in the 1617 area and that may not be hit. If it is though then it's worth noting that the 61.8% fib retracement of the move from 1560 SPX is in at 1617 SPX, which is at about 1615 ES. The very strong positive 60min RSI divergence that has been building on the ES chart is suggesting that we will see a decent bounce soon. ES 60min chart:
On other markets I'll show the big triangle on CL today rather than on WTIC. This is a decent quality pattern which has broken up, retested broken resistance three times while forming a bull flag, and then has broken up from that flag. The triangle target is a test of the 2008 high in the 147 area and I am taking that target seriously. Next resistance is the 2011 high in the 115 area. CL daily chart:
On bonds ZB made the 133 double-bottom target yesterday and is showing signs of reversal here. A rising wedge has formed and broken down after a double-top has formed on negative RSI divergence. The double top target is in the 132'15 area. After a retracement I'm still looking for ZB to make the next target over 134 and will be watching the retracement carefully for signs of reversal back up. ZB 60min chart:
GBPUSD is now close to a test of rising wedge support which I'm expecting in the 1.541 to 1.542 area. Worth noting that 1.542 is a possible H&S neckline. GBPUSD 60min chart:
GLD is close to my next target area near 138. We may see reversal there though I'm not seeing negative divergence yet. GLD 60min chart:
This is a very key support area being reached on SPX and ES, and at the start of this retracement I highlighted the rising support trendline from 1343 particularly as a level which, if broken, would eliminate a number of bullish pattern scenarios and invite a test of the 1560 low. I'm expecting at least a decent bounce soon and I would mention that there is currently a possible double-bottom in place on ES overnight with a target at 1643.75 on a break over 1634.75. I would see yesterday's breakaway gap on SPX at 1652-7 as hard resistance that should not be broken until this move down has finished.

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