- 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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Tuesday, 3 February 2015

Key Inflection Point Here .... Again

After an incredibly whippy day yesterday the close left a very strong bull setup on SPX. This may just be a bull trap but if so, it is a very thorough and well put together bull trap, and at the least I am impressed.

The pattern setup here is a falling megaphone from the last hit of range resistance in the 12064 SPX area, and that isn't inherently bullish here as it has already broken up and retraced 50%. What does look bullish is the possible double bottom targeting the 2069 area on a sustained break over 2025. SPX 5min chart:
What else is bullish here? Well I have a generally reliable 60min RSI 14 buy signal and a weak daily RSI 5 buy signal. The reversal candle yesterday is bullish as long as it is confirmed by a green candle today. Main resistance is at the daily middle band at 2026 and bulls may well try a breakaway gap over that at the open. If so then bulls need to keep that gap unfilled today. SPX daily chart:
I mention regularly that when there is a break through the middle band at 2017  with a strong candle on whatever timeframe then that is sometimes negated by a strong candle reversing that move. We could be seeing that here tough I would note that weekly candles only fix at the close on Friday. . SPX weekly chart:
TLT has reached lifetime trendline resistance and bonds are in a major inflection point here. This resistance may well hold and if so we would be making a big high on bonds here. Watch this space. TLT weekly chart:
This is a key inflection point and we are about to see a significant move. A bullish break today targets a retest of range resistance in the 2064 area and, if broken, a test of the all time high. A failure here should see SPX break under range support in the 1990 area and open up the targets below. If we see SPX over 2040 today I'll be assuming a bull break. If we see the opening gap on SPX at 2020.85 filled I'll be leaning bearish and if we see a subsequent break below 2010 I'll be assuming a bear resolution today. Either way this should be an interesting day and may well set the direction for the next few days.

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