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Wednesday, 30 April 2014

Slow Starter

Yesterday was more tedious than I expected , though the bulls made some significant targets, notably the 50 hour moving averages on both SPX, now at 1873 and ES, now at 1868, so in effect at the same SPX level. The action yesterday looked somewhat bearish in the afternoon, and a new falling megaphone has been established, which I posted on twitter last night. If we see weakness this morning, which seems likely, then I will be looking for possible support at 1873 SPX. SPX 60min chart:
If SPX breaks back below the 50 hour MA, then I have the next serious support in the 1860-3 range, with the daily middle band at 1863, and the 50 DMA at 1860. This should be very strong closing support, though we could see a move underneath intra-day. SPX daily chart:
What the bulls failed to manage yesterday was to break over resistance on the large falling megaphone on NDX. If we are to see a test of the 1897 high on SPX, that would most likely be a prerequisite. After we see a low today, if indeed we see some retracement, the bulls will most likely get another chance to break up from the NDX pattern this afternoon or tomorrow. NDX 60min chart:
Oil bounced as I was suggesting yesterday morning, but failed hard at the daily middle band, and has now broken megaphone support on both the USO and CL charts. I've updated my WTIC chart to show the slightly ambiguous setup here, but as I mentioned yesterday, overall this has me leaning short on oil. The next obvious target is a test of the 97.37 low, and on a break below that I would have a double-bottom target in the 89 area. I have drawn in a possible descending triangle that might well give strong support in the 91.25 area. WTIC daily chart:
For today I'm leaning towards seeing some retracement that may be confined to the morning but may equally last much of the day. The SPX support levels that I will be watching are in the 1871-3 range, and then the 1860-3 range. I would be very surprised to see a close today below 1860. FOMC today, a heavy news week, and Thursday and Friday are both historically bullish. After any retracement is done I'd be expecting to see a run up into the NFP numbers on Friday.

Tuesday, 29 April 2014

No Cigar

The bears put on a brave show yesterday trying to break down through support but the afternoon rally wiped away the losses, and SPX closed well above support at the daily middle band and the 50 DMA. Now, with 16 of the last 18 Tuesday having closed green, the bulls have their shot at breaking out of the current range. SPX daily chart:
The first order of business for bulls today is to break back above the 50 hour MA, which was resistance just above at the close yesterday, and then to break above falling megaphone resistance for the current retracement. I have that in the 1874 SPX area at the close last night and it's possible that we could see SPX gap over that at the open. If that breaks (and holds) then the megaphone target will be a retest of the 1883.27 high, and if that is broken then the path will be open to retest the 1897 high. SPX 60min chart:
However I would attach more importance here to the much larger falling megaphone on NDX, and the bulls' main target here in my view is to break (and hold) above megaphone resistance there, currently in the 3595 area. That would open up a test of the 3717.36 high, which would most likely be accompanied by new highs on SPX. As with SPX the open double-top target that I noted on the chart yesterday morning was reached at lunchtime yesterday, so there is no longer unfinished business below on either chart.  NDX 60min chart:
On other markets I'm still watching the possible double bottom setup on GLD. That would target the current rally high at 133.69 on a decent break back over 128.35. Given the strong performance of the 50 hour MA as support in uptrends and resistance in downtrends, I'd be concerned if GLD broke back below that. GLD 60min chart:
I posted the USO 60min chart early last week looking for a move to rising megaphone resistance, and that was hit yesterday. This megaphone will most likely break down in a few days, but short term there is some positive RSI divergence supporting a bounce here. USO 60min chart:
Moving to a closer up view of the CL chart, you can see that there that megaphone support trendline has already broken slightly intraday, but there is a strong short term bull case based on the falling wedge that broke up overnight, and the possible double-bottom that would target the 102.66 area on a break over 101.50. A possible retest of the 104 area high is perfectly possibly without negating my longer term bearish view. CL 60min chart:
So what of today? Well 16 of the last 18 Tuesday's closed green, the day yesterday was, overall, a significant bear fail, and significant upside today could well propel SPX to new highs within days. Let's see whether the bulls can do better than the bears. There is also FOMC today and tomorrow of course, though that is possibly a two edged sword, given that the next sliver of taper will most likely be going ahead. For today at least the bulls start with the ball and I'll be leaning bullish until demonstrated otherwise. A decent AM low today should most likely be a buy.

Monday, 28 April 2014

The Three Bears

Hopefully everyone caught my warning on twitter on Thursday night that we might well see more downside, and in that case I'd be looking for support in the 1860-2 range. SPX went a little lower than that and at the time of writing is below both the ES 50 hour MA, currently at 1867 ES, and the SPX 50 hour MA, currently at 1870 SPX. These are important levels to watch today, as they are now short term overhead resistance.

Support has been at the daily middle bollinger band, now at 1862 SPX, and the 50 DMA, now at 1858 SPX. These are important support, and if this area is lost with any confidence, then I would be looking considerably lower, with the first target on SPX at the last low at 1814.36. A break below that low would trigger a double top target in the 1730 area, effectively to test larger double-top support at the 1737 low. A break with confidence below the 1737 low would then trigger a larger double-top target in the 1578 area, which is in the ideal range for any serious retracement this summer as it is a retest of the broken 2007 high at 1576. This is a topping setup that I am taking very seriously, and the first stone in the landslide down to that low would be if the 1858-62 support range being tested on Friday were broken with any confidence. SPX daily chart:
There are signs of a bounce on the SPX 15min RSI that I'd expect to deliver in the absence of a strong downtrend. There is also a small falling channel with resistance in the 1870 area, which would be a very good fit with a test of the SPX 50 hour MA from below. Also worth noting on this chart is the double-top target at 1854 that has not yet been reached. SPX 15min chart:
There is also an open double-top target in the 3495 area on the NDX chart I posted on twitter on Thursday night. The touch of falling megaphone resistance at the open on Thursday confirmed this as a valid pattern and there are only two clear target on this large (ultimately 70% bullish) pattern. The next target within the falling megaphone is south of 3300 and falling rapidly. If NDX can break and hold above falling megaphone resistance then the target would be the 3717.36 high. NDX 60min chart:
The overall topping setup here on SPX is textbook, and I may well save it for use in a book I'm planning if it breaks down. The setup on Dow is even more so, and that is where I drew the three bears title for this post from. There are three nested double-tops on Dow here, and the first broke down and made target on Friday. That has established a rising channel from the April low on Dow, and if we are to see a strong rally here, then ideally that should hold. If it breaks then the obvious next target is that April low at 16015.32.That level is the medium-sized double-top support and a break with any confidence below would target a test of the February low at 15340.69. That is the large double-top support and a break below there would target the 14050 area. INDU 60min chart:
On other markets USO is now close to the rising megaphone support I was looking at last week, and when that is hit there would either be a strong reversal back up, or a strong break down towards yet another double-top support level. USO 60min chart:
This is an important support test and if bears can break this down then the spring high is most likely behind us now. There is a very decent topping setup and the seasonality is ideal. My only concern is that bear credibility is low at the moment but we'll see whether they can rise to the occasion. Whatever happens today, there is a very decent chance that we will see a green day tomorrow, as Tuesdays have been consistently bullish so far this year.

Thursday, 24 April 2014

Key Inflection Point Area

After very solid AAPL earnings last night ES has gained 10 points and is testing those highs at the time of writing. This means that the inflection point that I have been talking about over the last few days is likely to be tested today and tomorrow, and the way this breaks will most likely determine direction for the next few weeks.

Front and centre this morning is the falling megaphone on NDX, with untested falling megaphone resistance in the 3610 area, and a distinct possibility that NDX will gap over that at the open. That would be bullish and would suggest strongly that SPX will test the highs, but NDX will still look potentially bearish because of the nice looking H&S forming there on the daily. The ideal H&S right shoulder high would be in the 3630 area, and I have an alternate, lower probability, falling megaphone resistance trendline in the 3670 area. NDX 60min chart:
The setup on TRAN here is clearer, with megaphone resistance in the 7780-5 area today. In this context this pattern is a broadening top, which sounds bearish but is actually direction neutral. The test of megaphone resistance could signal a significant reversal back down. There is obvious negative divergence on the 60min RSI here, and SPX and NDX will also show negative divergence today on a break above the current RTH (regular trading hours) highs. TRAN 60min chart:
There is no trendline to watch on SPX but there is obvious resistance at the test of the 1897 high, and we may see that tested this week. There should be significant negative RSI divergence at that test, and regardless of whether we see a major reversal there, it is an obvious place for a retracement of this move up from 1814. The obvious target for that retracement would be at the 50 hour MA, currently at 1857 and rising. SPX 60min chart:
Looking at the SPX daily chart the upper bollinger band is currently at 1900 and that should be an effective cap for any rise this week. I've mentioned the possibility on the chart that we might currently be making the second high of a double-top here and if so that would work very well from a TA perspective. SPX daily chart:
On the SPX weekly chart the upper band is now at 1895 and should close the week at 1900 or lower. That should be strong closing resistance tomorrow. SPX weekly chart:
On that last chart I gave 80% odds that the lower band would be tested before the upper band, after the punch through the weekly middle band a couple of weeks ago. Not everyone seems to have understood that this is just a historical probability, and that there was inherent within that a 20% probability that the upper band would be hit first instead. In the same way a 70% bullish falling wedge will break downwards 30% of the time. That isn't a failure, it is just the historically lower probability path. Just to clarify that for anyone who didn't understand that already.

I'd like to see a gap fill today and that would be a strong buy if we see it. As long as yesterday's low at 1873.91 holds then the lean today should be bullish and if we see any significant trendline breaks today I'll be posting those on twitter. I'm away tomorrow so my next morning post will be on Monday. Everyone have a great weekend. :-)

Wednesday, 23 April 2014

Absent Friends

My wife and I had some shocking news this morning when she was told that the husband of an old friend of hers was stabbed to death by a random nut in a pub last night. I didn't know him that well but we'd spent some time with them and he was a very decent, hard working, family man who leaves a wife and two children behind. Just incredible, and a reminder that very bad things can happen to good people, and that people don't always make it to three score years and ten even nowadays. After two close friends of mine died within three months of each other two years ago that is now three people in my circle all dead from various causes in their early to mid-40s. Very bad luck and extremely thought-provoking. 

Back to the markets where SPX broke over the last rally high at 1872.53 as expected. The next major target is a test of the current high at 1897.28, and the possible second high of a double-top that could be made there. We may well see some retracement today, with the obvious target at a retest of that broken resistance, and that could set up negative RSI divergence on the 60min chart for the retest of the highs. SPX 60min chart:
Supporting the possibility of a double-top on SPX are the NDX and TRAN charts. I showed the possible H&S forming on the NDX daily chart yesterday and today I'll show the falling megaphone from the March high on the NDX 60min chart. NDX came close to testing megaphone resistance yesterday and I'll be watching that carefully on the next push up. It's worth noting that a break over megaphone resistance could be a bearish overthrow before this patterns breaks down, and that the megaphone resistance area is a decent fit with the possible H&S ideal right shoulder high in the 3630 area. NDX 60min chart:
On TRAN I have a standard megaphone, and resistance there is a very good fit with the megaphone on NDX. With all three of SPX, NDX and TRAN I'll be watching for any negative divergence on the 60min RSI 14 at the hit of these resistance levels. TRAN 60min chart:
On other markets I'm been watching for the possibility that oil would make a double-top at the test of the last highs and that may be happening. On the USO chart below I have oil falling to rising megaphone support and if that breaks then the next stop is double-top support. On the bigger picture the setup supports the double-top and I'd give even odds here on that playing out. USO 60min chart: 
On GLD the second low of a double-bottom may have just been made, and if so then on a break over 128.25 the target would be a test of the last high at 133.69. I'm expecting that GLD and USO will both most likely bounce today but on GLD that may just be the start of a big move up. GLD 60min chart: 
I'm leaning towards seeing some retracement today with the obvious target being a retest of broken SPX resistance at 1872.53. That should set up the next push up at which time we will see whether we are going to see a major reversal into the main spring/summer decline in the next few days, or SPX, NDX and TRAN all break up through resistance in a move that would most likely last several more weeks. 

Tuesday, 22 April 2014

Bullish Tuesday vs Key Resistance

Yesterday was a very dull trading day that almost achieved complete meaninglessness, avoided only because SPX held above the daily middle band all day, closing 12 points above the middle band. SPX is therefore consolidating above the daily middle band and the next obvious target on the daily chart is the daily upper band, now at 1897. SPX daily chart:
Before SPX can make an attempt at testing the 1897 high however, it will first need to break up through resistance at the last rally high at 1872.53. The intraday high yesterday was at 1871.89 which was just short of a test. The double-top target is a whisker higher at 1873 of course.

What are the odds that 1872.53 resistance will be broken? I suggested 70/30 in favor of a break to someone last night and I'd put that higher this morning. Tuesdays have been extremely bullish lately, even through the sideways action that we have seen so far in 2014, and everything seems set up here for a break above to at least test the current 1897 high. We may well see 1872.53 broken in the first few trading minutes today. SPX 60min chart:
Where are we up to on the possible H&S forming on NDX? NDX closed at 3560 yesterday, some 70 points, and two or three days, short of the ideal right shoulder high there. If SPX and NDX are in sync then NDX would reach the ideal right shoulder high at about the same time that SPX tests the 1897 high. We could well see the Spring high made then and there. NDX daily chart:
I'm going to be posting some foreign indices over the next few days to see where those are up to, and the first of those is the FTSE, where it seems likely that the 2014 spring high has already been made, and that FTSE is just waiting for the US to peak too before retracing at least to rising wedge support. FTSE daily chart:
I might be mistaken but I'm expecting to see resistance at 1872.53 SPX broken today. Once that breaks we might see a retracement to test the daily middle band at 1859, but as long as that holds I'll be looking for a move up to test the 1897 high, and we might see that tested this week.

Monday, 21 April 2014

The H&S forming on NDX

SPX made some progress towards the double-bottom target at 1873 on Thursday. That is in effect a retest of the last rally high at 1872.53 and is the last serious resistance between SPX and a test of the current highs. SPX 60min chart:
Though the gain on Friday was modest the bull case still strengthened somewhat as SPX closed six points above the middle band after a day where the middle band held as support. SPX daily chart:
Looking at the rising megaphone on the 5min chart I won't be looking for a retracement to megaphone support unless the opening gap from Wednesday morning is filled. Short term though this chart seems to be looking for a bit of retracement. SPX 5min chart:
So what happens if bulls take out the last rally high and break towards a test of the current highs? Well that could be the start of a new bull wave up, but we might just be seeing SPX make the second high of a double-top as part of the usual Spring high. For that setup I won't be watching the SPX as much as NDX, as there is a very nice H&S forming there, and the ideal right shoulder high would be in the 3630 area, very close to significant resistance at the 50 DMA, currently at 3626. If NDX reverses hard near there then the retracement on SPX since the start of April has just been a warm-up for the main summer decline. NDX daily chart:
For today I'll be watching support at the SPX middle band in the 1858 area and resistance at the last rally high at 1872.53. I'm not expecting to see a big move but could be mistaken.

Thursday, 17 April 2014

Doodled Megaphone

Yesterday morning SPX gapped over the 50 hour MA at 1843, double-bottom resistance at 1844, and the 50 DMA and falling channel resistance at 1847. Those held as support for the rest of the day and the opening gap didn't fill, so as long as they hold as support this morning the next step is to proceed towards the double-bottom target at 1873, in effect a test of the last rally high at 1872.53. SPX 60min chart:
At the low on Tuesday I drew in a half-doodled possible megaphone on my SPX 1min chart. I didn't mention it yesterday morning but it had my attention after the AM high yesterday was at megaphone resistance. We could see a test of 1872.53 within that megaphone today. SPX 1min chart:
The close today will be interesting on both the daily and weekly charts. On the daily chart the close yesterday was slightly over the middle bollinger band, currently at 1859. Promising but not yet a break over it with any conviction. I'll be watching to see whether SPX can do better today to open up the daily upper bollinger band as a target. SPX daily chart:
The close on the weekly chart will also be interesting to see whether we see a conviction break back over the middle band, currently at 1832. Regardless of that there is still an open 80% probability target, that I was looking at on Monday after the punch below the middle band, to hit the lower band before the next hit of the upper band. This might of course be one of the other 20%, as a similar candle was last year. SPX weekly chart:
For today I'm looking for a morning low and then a move up that could reach the double-bottom target at 1873. There is a chance of a significant decline in the afternoon which I'll be watching for. Tomorrow is Good Friday so my next post will be on Monday morning. Everyone have a great holiday weekend :-)

Wednesday, 16 April 2014

Tug of War

The only two kinds of TA that I refer to every day are classical charting, mainly my own, and Elliot Wave. For EW I don't of course use Prechter and EWI, as Prechter's analytical skills have long been eclipsed by his faith that we are in some kind of apocalyptic ending move which is the climax of a massive 5 point move up from 1500 AD, or 500 AD, or whatever. I'm not one to mock the religious beliefs of another, but faith has no place at all in analysis, so while Prechter stands on his lonely mountain top waiting for the end of the world as we know it, I've been ignoring him and watching the calls of my very capable EW chartist friends Pug and Alphahorn.

Much of the time my view is reasonably in sync with Pug and Alphahorn, which is reassuring as we approach the market using very different methods, but every so often there is a significant difference of opinion, and we have been having one of those since the low on Friday. My view, and the view of Cobra, the only classical chartist that I read every day, is that the low on Friday was a technically weak low, which means that after the likely rally (that all four of us called for), would most likely be followed by a lower low. Pug and Alphahorn on the other hand have been running primary counts which showed the low on Friday as a significant low.

I've said before that when there has been a significant disagreement of this kind in recent years then Pug and Alphahorn have been winning those two times out of three, and this may be one of those times, though I was really expecting more downside here, and this may still yet still turn out to just be a rally.

All of these three run subscription services by the way that in my view are very well worth the money. Of the three only Alphahorn runs a model portfolio, and that returned 61.78% last year, which I suspect disappointed him as he had been hoping to beat his 2011 return at 75%.

Returning to the setup today we have two remaining main options for the rally here, and my first and preferred option so far this week may well be steamrollered at the open. On that option I have resistance this morning at the SPX 50 hour MA at 1843, double-bottom resistance at 1844, the 50 DMA at 1847, and falling channel resistance at 1846-8. I posted the chart below on twitter yesterday night and the other resistance level I mentioned then was declining resistance from the high on ES which I mentioned would be a decent fit with SPX falling channel resistance this morning. That's still the case, but that broke overnight and is now at 1841.25 ES, some seven points below ES at the time of writing. If that remains the case then SPX will gap over all of these significant resistance levels at the open, and trigger a double top target in the 1873 SPX area. SPX 60min chart (from yesterday night):
If that happens then that brings us to my other main rally option, and that is a blend of the next two resistance levels above at the SPX daily middle bollinger band, which closed yesterday at 1859, and the last rally high, which peaked at 1872.53. There's a chance that we could see a failure at the daily middle band of course, but the obvious intraday target is a test of 1872.5 as the double-bottom target is at 1873. What I would look for then if we see a gap over 1848 SPX at the open that doesn't fill, is a run to test 1872.53, and then we see whether the daily middle band at 1859 SPX can hold as support. If bulls can recover back over the daily middle band and break the last rally high at 1872.53 then they should be back in the saddle and looking to test the 1897 high. SPX daily chart:
On other markets GLD broke the rally support trendline from the April 1st low yesterday morning and I'm watching to see whether the April 1st low at 123.11 can hold. If not then we are in a new move down. GLD 15min chart:
TLT is still making slow progress towards my upside target from my January projection. Negative divergence still a concern. I haven't updated my comments. TLT daily chart:
It seems likely that SPX will gap over resistance this morning, and that is some significant resistance, including the 50 hour MA which was the brick wall that reversed the last rally. This will significantly improve the odds of a bullish outcome here and opens up a retest of that rally high in the 1872/3 area. That retest is my second likely point of failure if this is a rally and we'll see also whether bulls can re-establish the daily middle band as support. I understand that Yellen will be publicly distributing dove guano at 12.30 and if she manages to do that without getting her foot stuck in her mouth again, then that may well give the bulls a boost.

Tuesday, 15 April 2014

Rally Resistance Levels

I was explaining yesterday why I think that the current move on SPX is just a rally within a downtrend that has not yet bottomed out. That means that I am watching the significant resistance levels above in the expectation that one of those will be a brick wall at which SPX will reverse into the next move down. Yesterday the rally closed at 1830, on the weekly middle band that broke on Friday and is significant short term resistance. It may be that the rally will stall there, though we might also see a break over that resistance and then a return to close back on or underneath it by the close this week. SPX weekly chart:
On the SPX daily chart the important resistance levels are the 50 DMA at 1845 and the middle bollinger band at 1860, which is the highest of the rally targets that I am watching here. SPX daily chart:
The two most significant resistance levels that I am watching here however are on the SPX 60min chart, and they are the 50 hour MA, currently at 1850, and falling channel resistance, which closed yesterday in the 1853/4 area. Both are falling rapidly and if SPX were to just trade sideways into Thursday then both could well have fallen to the current levels. That is an option but, Yellen permitting, I have a more immediate alternative that I'm also considering. SPX 60min chart:
That more immediate alternative comes from the double-bottom that has formed on SPX after the retest of Friday's low yesterday afternoon. That pattern has a target in the 1854 area, and for that to be hit within the falling channel that would really need to be hit this morning. I was thinking that Yellen's remarks this morning might give SPX a push but the effect seems to be muted so far. A possibility to consider however. SPX 15min chart:
Last chart of the day is USD, where I mentioned near the end of last week that the second low of a short term double-bottom may have been made. This would be the smaller of two nested double-bottoms that could take USD back to the 84.25 area, and I've marked the structures and targets for those patterns on the chart below: USD daily chart:
As I explained yesterday, the overall technical odds still favor the bears here, and after this rally I'm expecting another leg down to start with a target somewhere in the 1730-80 SPX area. I would normally expect that the current falling channel would hold on this rally, though that isn't required, and so key resistance is now in the 1850-5 area. That will drop by ten points or so per day so within two days that resistance will be at yesterday's highs, and SPX may just trade sideways into that then. Either way I'd recommend not getting too attached to any long trades for the moment.

Monday, 14 April 2014

Weekly Middle Band Punches

Friday's close saw a punch below the weekly middle bollinger band, and that was a bearish candle, as I mentioned it would be on Friday morning. SPX weekly chart:
Generally speaking I would take the target from a punch below the weekly middle band like this one to be either the weekly lower band or a major weekly MA (50, 100 or 200), if there was one of those above the lower band which there isn't currently. 

I've had a look back through these historically, and have looked at examples where the punch has come after a touch of the weekly upper band, and found 45 examples going back to the start of 1980, of which 4 out of 5 went on to hit the weekly lower band or a major MA in the subsequent weeks. Of these:
  • 34 went on to hit the lower band
  • 4 hit a major MA and reversed back up there
  • 7 reversed back up to the upper band
I also had a look at the weeks after those bollinger band punches and of those 45, 19 rallied the following week, and 5 of those were among the 7 examples that returned to the upper band. 

Takeaways here are that SPX is 80% likely to hit the weekly lower band in coming weeks, and that there is a slightly under 50% chance of seeing a positive week this week. There is a 20% chance that SPX will return directly to the weekly upper band but this is helped a lot by a cluster of these in the 1986-91 period. If I had taken my sample for the last twenty years only, then the only time this happened out of 22 examples going back to 1994 was in August 2013. 

On the SPX daily chart the open and close on Friday were both under the daily lower band. The overnight action on ES is strongly suggesting that a rally has started and the rally targets on the daily chart are the 50 DMA, currently at 1843 and declining slowly, and the middle band, currently at 1861 and declining rapidly. SPX daily chart:
On the SPX 60min chart Friday morning's falling wedge evolved into a falling channel, and the obvious next move is a rally to channel resistance, currently in the 1855 area but declining rapidly. We could well see a rally into the 1830-50 SPX area here. There is no current negative 60min RSI 14 divergence, which suggests that we could see a lower low before that rally, but there is already some negative 60min RSI 5 and 15min RSI 14 divergence, and that may well be enough. SPX 60min chart:
Holiday weeks tend to lean bullish and the 60min chart here is arguing for a strong bounce. I'm going to be treating the 50 DMA at 1843 as my main rally target and would also note that the 50 hour MA is currently very close to falling channel resistance. That rally may or may not last until the end of the week and the historical odds very strongly favor a test of the weekly lower bollinger band, currently at 1771, before any retest of the 1897 high. 

Friday, 11 April 2014

Are We Having Fun Yet?

Well I was saying yesterday morning that the bears needed to reverse Wednesday's break up quickly yesterday and so they did. It's been a while since I saw a decent bull setup like that trashed as thoroughly and quickly as that was, and that is certainly food for thought.

After the break back under the daily middle band we returned to the original schedule that I outlined on Tuesday morning, which was that the move into Wednesday's close was a rally, to be followed by a new wave down resulting in a lower low, and so here we are this morning.

We now have a pattern for this move down from 1897 SPX, and it is a falling wedge. I posted it last night on twitter and here it is on the SPX 60min chart below. You can see that falling wedge support is currently intersecting the theoretical alternate rising channel support that I showed on Wednesday morning, and if this is just another pullback, then the obvious low would be at that intersection in the 1825-7 SPX area today. We could see SPX go lower, as falling wedges sometimes underthrow before breaking up, but the low would need to be a few points lower at most.

Falling wedges are 70% bullish of course, so classically the odds of a break up targeting a retest of the 1897 SPX high are 70%, and the odds of a break down targeting (in effect) the 1737 SPX low are 30%. Considering the overall background I'd be inclined to put that closer to 50/50 in this case. SPX 60min chart:
The close today is very important on the weekly chart as it is of course the weekly close. The weekly middle band is at 1830 SPX and bears want a conviction break below it today. Ideally 1820 SPX and lower but at least under 1825 SPX. SPX weekly chart:
On the SPX daily chart I have redrawn the current channel again, and am showing my best candidate, though I'm still not 100% happy with it. This version would favor a break down here towards a test of 1737 and likely reversal there. That level is a decent H&S neckline candidate of course, though it is also support on a decent looking possible double-top. Either way the downside target would be the 1575 area, which would be a hit of the ideal technical target for any strong retracement this year, at the retest of broken resistance at the 2000 and 2007 highs. SPX daily chart;
I have a nice looking rising wedge on CL here, but there is also a possible-double-top forming that needs to be considered because of the negative daily RSI divergence on the last high. You can see that over the last five similar signals all signalled reversals that hit oversold (from sell signal) or overbought (from buy signal), and that this last one hasn't made that target yet. It may not of course, but if we see CL drop back under 100 I have a double-top setup to take CL back to 90. CL daily chart:
This is a technically important day, and we will most likely see either a break down towards a retest of 1737 SPX, or the start of a break up towards a retest of the 1897 SPX area. This could very much go either way in my view so I'm not planning to get married to any positions before this clarifies.