- 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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Monday, 26 January 2015

Signifying Nothing?

The greek vote was convincingly won by Syriza last night and they are forming a coalition government with a mandate to try to renegotiate the terms of their debt relief package while remaining within the Euro. The news sent ES down hard but that decline has melted away overnight. Was that decline significant?

Looking at the ES chart it's hard to see that the overnight action was obviously bearish. The rising wedge from the low last week broke down and retraced 38.2%, which is routine in an ongoing uptrend, and the low retested broken falling wedge resistance, which leans bullish. we might see something more bearish happen today, but as it is this chart looks like a long opportunity rather than a short opportunity. ES 60min chart:
The action on SPX on Friday wasn't obviously bearish either. The retracement came down and almost hit the rising channel support that I had posted in the morning, and as long as that rising channel from last week's low holds, this is a bullish setup that may take SPX to a retest of the highs. SPX 5min chart:
On the daily chart there is now support at the 50 DMA at 2047 and daily middle band support at 2043, and it's going to be hard to get that excited about the short side until we see a break back below the daily middle band that holds into a daily close significantly below it. SPX daily chart:
My long term rising support trendline on oil from the 1998 low broke on a weekly basis on Friday. That is bearish and the next big support level is 40. Short term there is a possible double bottom in place that could deliver a significant bounce. Generally we would see a decent bounce before the main low, though not always. WTIC weekly main chart:
I'll be watching that rising channel today and a break below it would look bearish. If that breaks then bearish confirmation would come with a close well below the daily middle band.. Until we see at least a break of the SPX rising channel I'll be leaning long. 

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